For many investors who enjoy ultra short term operations, the skill of market observation is even more important. By analyzing the movements of the main force from the changes in the market opening, they can then determine their own operating methods. The following viewing methods may not be practical for everyone, and having these methods does not guarantee that you will only make profits without losses. Only through repeated practice can you find the suitable operating method for yourself. In other words, success or failure depends on yourself.
Short term trading is an investment method that utilizes stock price fluctuations within a day or a few days to earn short-term spreads. The short-term fluctuation direction of stock prices is difficult to predict, so there is a high risk in short-term operations. However, if the opportunity is seized, profits can be significant in the short term. The following principles are the "protective tips" for many successful short-term speculators, and also the insights gained by many failures at a high cost.
1. Take advantage of the situation
Some retail investors strongly believe in the strategy of "people abandon me, people take me, and I abandon", but little do they know that this is about cleverly choosing the timing of entering the market based on the overall development trend of the trend. Moreover, this strategy is usually more effective when applied to medium to long-term investments. Going against the market, taking short-term rebounds when the overall trend is declining, or seizing rebounds when individual stocks have already turned downwards at high levels, may result in a long period of stagnation waiting for you.
2. Be good at waiting for opportunities
Speculation also requires patience, the ability to calmly wait for the moment of speculation to arrive, and the most important thing is to avoid being impatient and guessing recklessly, as this can cause people to lose their rational judgment and make mistakes in decision-making. During the waiting period, it is not idle, one should pay attention to market changes and constantly analyze and think. When it's time to take action, take action; don't act recklessly. Be as calm as a virgin and as agile as a rabbit.
Buy when speculation is active in the three major markets
When the market is active and trading volume continues to increase, with individual stocks rising and multiple stocks hitting the limit up, it is relatively easy to do short-term trading. When there is an economic hot spot and there are leading stocks among them, it is even more important to seize the leading stocks and operate in the short term in a timely manner.
4. Follow cautiously below the limit up board
There are various reasons for the stock limit up: some are due to important positive news announcements; Some are due to the rapid rise of large market makers; Some are caused by the market makers holding too much funds, resulting in stagnant stocks. In order to attract public attention and pursuit, they do their own trend promotion. In the first two cases, there may be continuous limit up in the future. If you buy at the previous limit up board at this time, you should sell as soon as possible to ensure that your profits are safe. Otherwise, the stock price may rapidly decline at any time, and you may regret it later.
When encountering the third situation, do not follow up. Such stocks may hit the daily limit up in the morning and fall in the afternoon, and once they do, they are likely to continue falling, causing significant losses.
5. Timely leave the city for rest and recuperation
When you suffer a heavy blow in the stock market, you must know how to leave the market and rest. Don't be discouraged and stay in the stock market until you make money before leaving. Temporarily leaving the stock market allows one to adjust their mindset, reflect on their action strategies, analyze the reasons for failures, learn from the experiences of successful individuals, and calmly observe the fluctuations of the stock market from an observer's perspective. Timely and moderate rest is very beneficial for you to smoothly return to the stock market and achieve success.
Off market rest and recuperation are equally important for short-term speculators and general retail investors. After struggling in the stock market for a period of time, constantly monitoring the ups and downs of prices, one's spirit is bound to be highly tense. Taking appropriate rest, maintaining a balance between relaxation and contemplation, is beneficial and harmless for fighting in the stock market again.
6. Reasonably control the storage space
Short term speculation requires controlling positions. Short term profits may be high, but once the prediction is wrong, losses can also be significant. The upper limit of speculative capital is the maximum loss you can bear. Don't take the risk of using all your funds for speculative trading.
If you have 10000 yuan of idle funds, you can use it all for speculation, but when you have 1 million yuan, the situation is different. At the same time, you lose 20%. The former actually loses only 2000 yuan, while the latter loses 200000 yuan. Therefore, if you can only lose a maximum of 200000 yuan, then you can use a maximum of 200000 yuan for short-term speculation.
Stock selection criteria for short-term investors
Short term investors generally hold stocks for a short period of time, ranging from one or two days to one or two weeks; I usually don't pay much attention to the performance and potential of individual stocks, but only care about whether they will rise in the near future and how much they will rise. So the stock selection methods of short-term traders tend to lean towards technical analysis, especially market analysis. The stock selection criteria for short-term investors include the following aspects:
1. Strong trend. As the saying goes, 'The strong always remain strong, and the weak always remain weak'. Unless there are reasons to believe that a stock will turn from weak to strong, generally do not intervene in weak stocks. Strong stocks are not stocks that rise on the same day. There are the following methods to distinguish whether a stock is a strong stock:
The trend of individual stocks is stronger than that of the overall market. On the one hand, the overall increase of a stock is higher than that of the overall market. On the other hand, when it rises, it moves quickly, and when it falls, it has strong resistance to decline and falls slowly. Moreover, it will deviate from the trend and emerge from its own independent market.
Technically speaking, it is considered strong:
(1) RSI value above 50;
(2) The stock price is above the 5-day, October, and 30 day moving averages;
(3) When the market falls, the stock has support at key levels;
(4) No matter how the daily K-line of the market goes, the stock price will not hit a new low;
(5) Looking at the market opening, there is less proactive selling and large selling orders, with no volume of decline and volume of rise.
2. Strong main force intervention. Active transactions, frequent large-scale buying, signs of artificial control, signs of protection and pressure in key areas, rapid and shrinking trading volume, and frequent publication of article recommendations in newspapers and media all indicate that the main force is not small.
3. There are potential themes. Short term speculators like to speculate on obscure themes, and do not consider whether they are true or not, as long as the market agrees. But once the theme is exposed, the hype ends.
4. It is currently a hot spot for speculation in the market. Short term trading should avoid buying obscure stocks, but obscure stocks have explosive themes, and the main players have been collecting them for a long time, which may also become the target of short-term traders.
5. The technical form supports the continued rise of stock prices. It is difficult to grasp this point, but generally speaking, it is advisable to avoid seeing and selling signals in technical indicators, choose stocks that have already entered the overbought zone less, and try to choose stocks with technical forms and indicators that have just issued buy signals.
