There are many analytical indicators in the stock market, and it is impossible for investors to master them proficiently. Everything has its source, as long as we grasp the source. What is the most basic indicator for technical analysis of stocks? That is price and trading volume, other indicators are nothing but variations or extensions of these two indicators. The basic principle of the volume price relationship is "quantity comes first", which means that trading volume is an inherent factor in stock price changes: the increase or decrease in trading volume directly indicates that the long and short sides in the market have different understandings of the stock price at a certain stage.
(1) Moderate amplification of trading volume: When the market operates at a low level for a long time, the trading volume of individual stocks is basically in a sustained low state; When the market ends its adjustment and starts to move upwards, some individual stocks are the first to increase volume and maintain a continuous and moderate process of volume increase. Generally, it can be judged that funds are involved. At this point, it does not mean that we can immediately follow up, because after a mild increase in volume at the bottom, the stock price will also rise and touch the nearest pressure level. If the timing is not ripe, the next step is to reduce volume adjustment. This adjustment process cannot be lower than the previous low point of volume increase, otherwise it means that it has already fallen below the main cost zone range, proving that the market's selling pressure is still significant, and there will be another adjustment process in the later stage. So everyone must have a clear understanding that for stocks with moderately increasing bottom trading volume, a strategy of buying on dips in batches can be adopted.
(2) Continuous increase in trading volume: When the main force is preparing to enter the upward phase, they often make the trading volume graph very beautiful. Over a period of time, the trading volume graph continuously increases, and the stock price slowly rises, forming a pattern of price increase and volume increase on the K-line chart. The more beautiful the graph, the more likely it is to generate a large market trend.
(3) Continuous reduction in trading volume and decline in stock price: Continuous reduction in trading volume refers to extremely light market transactions, and most investors are not optimistic about the market's future trend, resulting in only people selling but no one buying, leading to a sharp decline in trading volume and continuous decline in stock price.
(4) Continuous decrease in trading volume and rise in stock price: At this time, investors generally have a positive outlook on the future, with only people buying and few selling. This situation usually occurs in the middle of the trend, and everyone agrees with the future trend. At this point, everyone should firmly buy, wait for profits, and sell when the stock price is weak and there is a huge release.
(5) In the early stage of the rise, the trading volume suddenly increases: In the early stage of the rise, due to insufficient chips in the hands of the main force, the stock market suddenly comes, and the main force must raise and build positions. At this time, a sky high trading volume will be seen on the K-line chart. At this point, investors should not blindly chase after the rise, as there will often be a contraction adjustment in the following two days. Everyone can intervene at a low price during the adjustment. However, there is a special situation that needs to be noted, which is also a method used to avoid the frequent occurrence of ineffective B-points. That is, when the stock price has been in a sharp decline state after the opening, and may even have reached the limit down, but suddenly releases a huge increase or even reaches the limit up within an hour of the end of the trading day, and the software issues a B-point, then this B-point should be cautious and not operational. The next day, it will inevitably fall sharply because the previous increase belongs to the trend of the main force pushing up the shipment. If you must participate, you can intervene when there is a sudden increase in volume during the sharp decline, but you must sell at the high opening the next day!
(6) At the end of the uptrend, the trading volume suddenly increases: when the stock price rises to a certain height and releases a huge amount, it usually indicates that the forces of multiple parties have been exhausted, and it will be difficult for the market to continue to rise in the future.
(7) During the decline, the trading volume suddenly increases: The huge amount during the decline is usually the last concentrated release of bearish forces, and the possibility of a further significant decline in the future is very small. A short-term rebound may be right in front of us.
(8) Shrinking limit up board: When the price of a stock is at the limit up board but the trading volume is low, it indicates that the target price of investors in the market is higher, so they will not sell the stock at this time, which is why there is no large trading volume. The next day, it will attract more investors to increase their buying momentum and trigger a stronger upward trend.
(9) Shrinking volume limit down: Due to the sudden occurrence of significant negative news in the market or individual stocks, the price of the stock suddenly falls, and there is no trading volume accompanying it, so investors are generally deeply trapped.
