How do retail investors use turnover rate to select stocks?

For stock investors, they should have heard of the industry term turnover rate, which is a very important buying and selling reference in the stock market. Because it is more reliable compared to technical indicators and graphics, many people use turnover rate to select stocks. There are also various methods to use this indicator to select stocks. Below, we will explain in detail how investors use turnover rate to choose stocks?

1. Choose stocks that are generally favored by many market makers and have great market potential, and these stocks are usually representative of a trend in the stock market. If both investors and main players choose such stocks, it will reduce the risk factor of investment and increase the return rate. And although a certain market maker holds stocks with strong control ability, they are easily suppressed and have a high risk coefficient. But if you can buy stocks with high turnover rates appropriately, you will generally have substantial profits, and the operation is simple with a low risk factor.

2. Choose a stock that frequently changes hands during a certain period of time

Some stocks may have a particularly high turnover rate within two to three days due to the use of internal market information, but this situation is difficult to maintain because they are often suspected of borrowing information to clear inventory. If you buy such stocks, the risk is very high. Therefore, if you operate such stocks, you must choose stocks that frequently change hands within a certain period of time and have an increasing trend. Stocks like this often have higher gains than the overall market, so do not choose stocks with higher turnover rates in a short period of time.

3. Do not choose stocks with low turnover rates

At present, the domestic stock market is still in a speculative market where individual stock price increases are necessary to ensure the entry of main funds. Only when the stock turnover rate is sufficient can the price continue to rise. Stocks with low turnover rates lack financial security, and the market is sluggish, making it difficult to accelerate.

Through the above introduction, I believe everyone knows how to use turnover rate to select stocks. Of course, the methods introduced above are only for reference, as the stock market is unpredictable and no one can predict the future. Therefore, only by learning more skills in analyzing the stock market, mastering investment knowledge in the stock market, and always remembering to reduce risks, can we truly make profits in the stock market.