The distribution of chips, accurately referred to as the "cost distribution of holding circulating stocks" in academic terms, is based on the distribution of trading volume in different price ranges and the resulting distribution at different prices. Used to reflect the overall position quantity at different price levels. For the main players, how to obtain or sell chips can be described as exhausting their efforts, resulting in various forms of performance on the candlestick, leaving retail investors confused. However, in the display of chip distribution, it is constantly changing.

So what do you think of chips?

The internal statistics of chips are the number of stocks traded in each price range. We can see the operational stage behind the main funds through the distribution of some special chips; The red numbers on the left side of the graph represent different price ranges, and the two purple lines on the left side of the graph represent the price regions where 90% and 70% of the chips are distributed; The yellow horizontal line in the figure represents the average holding cost of the market, which is the average price of all chips. The area at the top of the yellow arrow in the figure represents the holding market. The chips at the bottom of the yellow arrow in the picture represent profit taking positions.

According to the design principle of chip distribution indicators, we know that chip distribution is actually a visual display of the distribution chart of all tradable shares of a stock arranged according to the holding cost. When you plan to participate in a certain stock, this chart becomes the strategic and tactical decision-making basis for you to know and strategize.

Composition of chip distribution

1. Chip Column: The chip chart is composed of chips beads of varying lengths, with each horizontal main force representing a price. The length of the column represents the corresponding trading volume for that price, and the longer the column, the more trading volume for that price. If the stock price stays near a certain price for a long time and there are a large number of transactions, the corresponding chips are usually very dense, forming a small three head pack, which is commonly known as the chip peak

2. The color of chips: red represents profit taking positions, blue represents trapped positions; The border between red and yellow is the current price.

3. Average cost line: The yellow line in the middle is the average cost line of all current market holders, which is the focus of the entire cost distribution.

4. Profit ratio: refers to the proportion of profitable market positions at the current price. The higher the profit ratio, the more people are in a profitable state.

5. Profit taking: The number of profit taking orders at any price point

6. The range between 90% and 70% indicates the price range in which 90% and 70% of the chips in the market are distributed.

7. Concentration: Refers to the density of chips used by the public. The higher the value, the more divergent it is, and vice versa, it is monthly concentration.

8. Chip deviation rate: The distance between the price of profitable chips and the average cost. The price of profitable chips below the average price is negative deviation, and the further away it is, the greater the negative deviation. Above is Zhengguili.

Practical chip buying and selling tactics:

1. Washing and returning to single peak density

Key points of the picture: After a long period of consolidation, a low peak density is formed, and then the stock price falls below the peak density. During the callback, there was no sign of a decrease in the original peak intensity, resulting in a decrease in trading volume. The correction range for market washing is not very large, usually less than 20%. Key points for trading: After a wash and correction, rebound to the peak of the original order density, and then increase volume to break through the peak of the original order density. This is a good opportunity for intervention.

Not all falling below the original concentration zone is a bad thing. It depends on the cooperation of transactions, volume reduction, and retracement. The original peak will not decrease, which means that the main players will not throw away their chips.

2. Peak shaving intensity gains strong support

Key points of the picture: The stock price breaks through the low single peak density with high volume and undergoes a pullback consolidation shortly after. It is supported at the low single peak density peak and then rises again with high volume from the support. Key points of trading: Another surge in stock price volume indicates the start of the main uptrend, which is a good opportunity to intervene.

3. Breaking below the high level, single peak, intensive stop loss

Key points of the picture: The stock price has already experienced a significant increase. The original low-level unimodal density is eliminated, resulting in high-level unimodal density and high-level unimodal density. It is not advisable to intervene here. Key points for trading: If the stock price falls below a high level with a single peak concentration, investors should promptly stop losses and exit the market.

4. After washing the dish, it becomes dense again

Key points of the picture: After the formation of the first low-level dense peak, a slight upward trend began. At the top of the small market, the first low-level dense peak still existed in large numbers. The stock price falls back to the first dense peak, forming a second dense peak, which combines with the first dense peak to form a unimodal dense peak. Key points of trading: The stock price breaks through the second peak concentration with a large volume, and investors can actively follow up.

In practical operation, the following points should be noted:

(1) Breaking through the low single peak intensive price range requires the cooperation of trading volume. But it's better to have a low turnover rate, which is commonly referred to as "volume reduction breakthrough".

(2) The pullback after a stock price breakthrough often receives support at the original low peak concentration. Once investors find that the stock price cannot fall further, they can build a moderate position.

(3) The stock price retracement falls below the low level and the price in the single peak intensive area should be guarded against the bearish trap.

(4) Low prices are not based on absolute stock prices, but mainly relative to the new concentration formed by a significant decline since the last concentration.

(5) If the stock price falls below the high single peak concentration zone price, it is better to reduce positions. Because the process of forming a high, single peak, and dense turnover is essentially the process of market makers distributing chips to retail investors, especially when the stock price rises too much.

(6) When the stock price breaks upwards, risk prevention is key, and short-term trading strategies should be adopted to guard against false upward breakthroughs.

(7) The longer the time for the formation of high-level dense peaks, the higher the density of peak positions, which can almost certainly be the result of market makers washing up and attracting funds. Because market makers' volatile shipments generally do not take that long, and the patience and confidence of individual investors are also limited.

(8) In the early stage, a single peak density at a high level often becomes a resistance level for the next wave of the market.