Stock investors know to buy low and sell high, and choose stocks at the bottom. What is a bottom? Great idea, but few have achieved it!

How to choose stocks is the most crucial. Next, I will share three stock selection tips with my fellow stock investors:

Tip 1: Don't speculate on the "bottom" stocks on the way down

Bottom, it seems like this stock is going to the bottom, but after you buy it, it's still falling, and there's still a bottom below it. No one can absolutely grasp the level of a stock, so choose stocks with established upward momentum. Take advantage of the price difference within the established upward trend.

Someone analyzed the trend of individual stocks in history: if a stock reaches a new high on a certain day or recently, there is a probability of over 70% that it will reach a new high in the next 60 days;

On the contrary, if a stock hits a new low on a certain day or a recent low, the likelihood of it hitting another low in the next 60 days is as high as 60% or more.

Tip 2: Choose stocks that run upwards at a 45 degree angle

The stock trend is most stable along a 45 degree angle, while the trading volume gradually decreases. This type of stock has the longest trend.

Upward at a 45 degree angle indicates that the upward trend has been established, and as long as it is not the end, it is difficult to change in the short term; And the gradual decrease in trading volume indicates that the main controllers or shareholders have a better mentality, that is, because they are optimistic about the future and have higher expectations.

However, when the stock price rises to a higher level and reaches the expected price of shareholders, the holding mentality changes, such as fear of main players distributing and their own profit taking requirements. At this time, trading volume will increase and risks will also arise.

Tip 3: Do not buy stocks that suddenly increase volume at high levels

When the stock price continues to rise or experiences a short-term surge, forming a strong trend, short-term trading becomes significantly active, manifested in a large trading volume during a significant increase in stock price.

Generally speaking, it is ideal for stock prices to experience a stepped increase in volume during the upward trend, as this means that off exchange funds are constantly buying, which will drive the stock price to continue rising.

However, when the stock price rises to a high level and suddenly experiences a significant increase in volume, it is important to control risks, as this is often a turning point between prosperity and decline.

Compared to the normal trading volume of individual stocks, if the daily trading volume suddenly increases to several times the normal level, it is often an extreme trading behavior of individual stocks, which means that the stock price is about to change. If the volume increases while showing the outflow of main funds, the possibility of a decline is very high, which will cause a large number of trapped stocks. The larger the transaction volume, the more difficult it is for the market to rise in the future, and the more obvious the short-term peak signal.