1、 What is turnover rate?

Actually, the general meaning of turnover rate can be understood literally. But what we need to understand about stocks is not just concepts. We need to know what a high turnover rate means and what a low turnover rate means in order to provide analysis and reference for stocks based on the turnover rate of the market.

A high turnover rate indicates a low lock up rate for the stock!

A high turnover rate indicates that there are many people paying attention to it, proving that the stock is good. In addition, a high turnover rate makes buying and selling easier. However, it's better to have a higher turnover rate at low prices, but if it's at high prices, you have to be careful!

1. The sudden increase in trading volume at relatively high levels indicates a clear willingness of the main force to distribute. However, releasing trading volume at high levels is not an easy task. Generally, trading volume is released only when there are some favorable news, and the main force can successfully complete the distribution. There are many examples of this.

3. New stocks are a special group, and it is natural for them to have a high turnover rate at the beginning of their listing. There was once a myth of unbeaten new stocks, but with the changes in the market, it has become a reality for new stocks to open high and go low after listing.

1. 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 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.

5. A turnover rate of 10% to 20% is relatively rare and belongs to a highly active state. A daily turnover rate of over 20% is an extreme situation that requires dialectical analysis. If in the third and fourth stages of the stock price cycle, most of the main market makers are reducing their positions and selling. If in the first and second stages of the stock price cycle, it is mostly the main market makers who attract funds, such as a significant increase in turnover rate above 15%. Be cautious when chasing high prices, as there is usually a chance for a correction in the second or third day of trading, and then intervene when prices are low.

7. In the daily stock selection process, we can consider a 10 day average turnover rate greater than 3% as a basic condition, and pay less attention to stocks that do not meet this standard. Especially for stocks with an average turnover rate of over 5% over 10 days, if the trading volume is reduced to below 1% to 3%, special attention should be paid.

Regardless of whether the turnover rate is too high or too low, as long as the accumulated increase in the previous period is too large, it should be treated with caution. From a historical perspective, when the daily turnover rate exceeds 10%, the probability of a stock entering a short-term adjustment is relatively high, especially when the turnover rate exceeds 8% for several consecutive trading days, it is even more important to be cautious.