The so-called turnover rate refers to the ratio between the cumulative trading volume and the tradable volume of a certain security within a unit of time. It reflects the strength of stock liquidity, combined with stock price trends, and can make certain predictions and judgments about future stock prices.

The turnover rate is a relative value, and its standard varies in different periods. Generally, the daily average turnover rate in bear markets can be set at around 2%. Stocks with a turnover rate greater than 2% can be considered high turnover stocks, while stocks with a turnover rate less than 2% can be considered low turnover stocks. Stocks with a high turnover rate have a greater increase (or resistance to decline) than those with a low turnover rate. For individual stocks, the turnover rate is directly proportional to their price, with stock prices rising as turnover rates increase and falling as turnover rates decrease.

Analyzing stocks through 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.

Continuous high turnover rate for a long time

After a high turnover rate appears, it indicates an increase in short-term liquidity and market attention, and the stock price is expected to develop upwards.

A high turnover rate at a low level is an exciting wash, indicating a high probability of the main players building positions.

Also, be sure to pay attention to abnormal turnover rates. If there is a sudden increase in volume, there must be a demon involved.