Stock selection techniques based on turnover rate

1. If the daily turnover rate of a stock is less than 3%, it indicates that the stock is not receiving market attention and trading is relatively quiet. However, investors should also pay attention to these two situations: one is the retail market without the participation of market makers; Another type is when the stock experiences a significant increase in volume and then oscillates horizontally in a relatively high price range. If there is a low turnover rate and low trading volume, it indicates that the market maker has no immediate plans to sell and is preparing to reach a new high.

2. The daily turnover rate of stocks is between 3% and 7%, indicating that the stock transactions are relatively active and the market makers are also actively involved. Shareholders can analyze the next move of the market makers based on the previous trend of the stock.

3. If the daily turnover rate of stocks is greater than 7%, or even more than 10%, it indicates that investors are very active in trading and their chips are rapidly changing hands. If it appears at a high level, there is a high possibility that the market maker will sell.

There are three main ways to assess the amplification or high turnover rate:

1. Firstly, it is necessary to observe whether its turnover rate can be maintained for a long time

Because a prolonged high turnover rate indicates a large amount of capital inflows and outflows, strong sustainability, and sufficient incremental funds, such stocks are operable.

2. K-line position with high turnover rate

Generally speaking, if a stock price experiences a high turnover rate at a high point after a continuous rise, it should be taken seriously by shareholders, and it is likely that the main force is selling; A high turnover at the bottom of the stock price indicates a high possibility of large-scale fund building, especially when the fundamentals improve or there are positive expectations.

3. Capital flow with high turnover rate

A high turnover rate can indicate both capital inflows and outflows. If the stock price closes with a bearish candlestick (preferably for long entities), and indicators such as DDX show a significant net outflow of large order funds, a high turnover rate is often the most significant form of major capital reducing positions; When the stock price closes with a bullish candlestick (preferably for long entities) and DDX indicators show a net inflow of large orders of funds, high turnover rates are often caused by one-sided buying by the main force, leading to a positive market outlook in the future.

4. Abnormal volume ratio and abnormal turnover rate

Suggestions for future operations:

1. If the daily increase exceeds 8% and the turnover rate remains or amplifies again, boldly continue to hold and grasp the rising market trend.

2. If the daily increase is extremely small or even less than 0 (and the decline) and the turnover rate is significantly reduced, the key to observing the volume ratio of the stock at the opening is that the chance of such a situation occurring in a large volume ratio is relatively small.

3. You must hold the stock for at least 3 trading days to avoid missing out on major market trends.