Wave trading refers to an investment method in which investors sell stocks at high prices and buy stocks at low prices. Band trading is actually an effective response to the current volatile fluctuations in the domestic stock market. Band trading may not be the most profitable way of trading stocks, but it has a relatively high success rate. I will divide some precautions for stock trading in different time bands for everyone.
1. Choose to operate on stocks in the rising channel
Band trading is different from long-term holding, as it generally only selects stocks with a major upward trend and currently in an upward channel for trading. For stocks with a clear downward trend, it is generally advisable to avoid taking this risk. It is best to buy when the main upward trend is good, intervene as soon as the turning point of the intermediate upward trend appears, and sell as soon as the main trend encounters resistance and falls back. Generally speaking, it is safer to intervene in stocks that have been trading at a low level for a long time when they start to increase in volume.
2. Narrowing down the scope of stock trading in the narrow band
A very important aspect of stock trading is how to choose stocks. Faced with thousands of company stocks in the Shanghai and Shenzhen stock markets, how to choose? Firstly, the scope of band trading stocks should be narrowed down, and the band trading stocks should be targeted at certain stocks or a single stock. Only by holding shares in a centralized manner is it more appropriate. Otherwise, if you buy and sell stocks everywhere, obviously you cannot balance thousands of stocks at all.
3. Long term analysis of stocks
Wave trading is different from short-term trading that only focuses on short-term trends. Investors should observe and review the stocks operated in the wave for the long term, and then grasp and understand the K-line chart trend of the stocks operated in the wave. Since it is a band operation, it is necessary for you to spend a lot of time watching the market and observing the K-line trend of the band operated stocks. Only through long-term observation can you have a clear understanding of your band operated stocks, and even if you buy stocks and get trapped, you will not be afraid. Simply put, it is to find the rules of its band operation.
4. Keep an eye on the market as a barometer
When buying stocks, whether it's in the market or short-term, try not to go against the trend. As a barometer of the stock market, the market must pay attention to its movements when buying and selling. If both the main and secondary trends of the market are downward, it is recommended to stop trading in the market. When the entire stock market is experiencing a sharp decline, it is necessary to pause the buying operation in the trading band. But after a few days of major market downturn, if you can take advantage of the opportunity to perform a wave like operation, the returns should be good, but the premise is that you are optimistic about the inevitable rise in the future market.
5. Buy stocks that have just started at the bottom
Band operation, in principle, only buys and holds stocks that have just started at the bottom or have just exited the bottom zone. In other words, if the stock price has doubled in a short period of time, even though it is still rising, it belongs to the scope of short-term stock trading and should not participate in wave trading in principle. Generally speaking, do not participate in stocks that have just started to adjust, as the market makers will only experience a significant increase after sufficient fundraising and market washing. Never participate in any uncertain initial adjustments.
6. There are rules for filling out stock trading forms when buying and selling stocks
In addition to the above points, band trading also requires mastering the skills of filling out orders when buying and selling stocks. Generally speaking, during band operations, when buying, the order should be filled out at a price higher than the current highest selling price, and when selling, it should be filled out at a price lower than the current lowest buying price. This ensures that your stocks can be traded smoothly. Prevent your funds from being trapped due to the failure to complete stock transactions.
In general, band trading refers to keeping up with the volatile trends of the overall market and individual stocks. This flexible and adaptable approach can effectively avoid market risks and preserve financial strength. However, it is also necessary for everyone to continuously improve their analytical and practical skills in stocks in order to find suitable buying and selling points and obtain better returns.
