Firstly, How to Pick Stocks: Simple and Effective Volume PickingThe arc bottom of the trading volume When the bottom of the trading volume appears, it is often the bottom of the stock price. The bottom of trading volume is judged based on past bottoms. When the stock price fell from a high level and fell behind, and the trading volume gradually decreased to the average bottom volume in the past, the stock price hit the bottom and stabilized and no longer fell. After that, the stock price showed a move, and the trading volume also shrank to the limit, showing a trend of price stability and volume contraction. This phenomenon is the bottom plate.
The important pattern of the bottom is that the volatility of the stock price is getting smaller and smaller. Since then, if the trading volume has been shrinking, the stock price will continue to continue until the trading volume gradually increases and the stock price is strong, and the ability to attack upwards will not be possible until the price and volume cooperate. Volume from shrinking to increasing means that the state of supply and demand has changed. The changing phenomenon of trading volume is from huge volume – decreasing → steady → increasing → huge increase, just like an arc, this is the arc bottom of the trading volume. When the arc bottom of the volume appears, it shows that the stock price will reverse and rebound. The extent of its recovery and its strength and weakness are determined by the magnitude of the enlargement of the trading volume after the appearance of the arc bottom. The shrinking of the trading volume in the bottom area means that the floating chips are greatly reduced, the stability of the chips is high, and the killing force is exhausted, so the phenomenon of price stability and volume shrinkage occurs.
After that, the increase in transaction volume indicates that someone is eating, so there is no purchase, so how can it be shipped? Therefore, the power of supply and demand for chips has changed at this time, and an upside market has been brewing. Stocks with bottoming out volume should pay special attention. When a stock’s decline gradually narrows or a gap occurs, usually the trading volume will shrink extremely, and then the volume will increase and the price will rise. This is the time for the stock price to bottom out and rebound.
Secondly, Subtle changes in volume require careful attention. A general precondition is that, first of all, the trading volume must shrink sharply. The shrinking trading volume reflects many problems, the most important of which is that the stability of the chips is good, that is to say, no one wants to sell this stock, and at the same time the stock price does not fall, which also shows that the market is exhausted. The soaring dark horse stocks. This is best reflected in the shrinking changes in volume. The volume suddenly increased from a certain day, and then maintained a certain range, which was maintained at this level almost every day. This change shows that a new force has stepped in and is investing in the stock in a planned way. This kind of intervention often causes the stock price to rise, but when the market closes, someone deliberately lowers the stock price, and its purpose is obvious. Therefore, we can see on the daily chart that the stock price rose slightly while the trading volume was enlarged, but it often formed a doji shape when the stock market fell.
Thirdly, The bottom-momentum trading volume of long-term bull stocks can be said to be the momentum of the stock price. A stock has often fallen or consolidated for a long time before the skyrocketing. At this time, the trading volume has shrunk sharply, and there will be continuous enlargement or moderate trading volume and the stock price Going up, a stock with an enlarged bottom transaction is like a stock that must have sufficient fuel before it can lift off. Only with sufficient bottom power can the stock price rise to a very high level. Therefore, a stock that is ready to soar must have the trading volume at the bottom. In the early stage of the rise, the trading volume must continue to increase, and the volume and price should cooperate. After the main rising segment, there is often a strong trend of the so-called boundless surge in which the price rises and the volume shrinks.
Basically, volume contraction is a reversal signal. Only when volume is contracted can it stop falling. During the downward trend, the volume must be gradually reduced to have a chance to rebound. However, after volume contraction, it may shrink even more. When is the bottom? The bottom can only be confirmed when the volume shrinks and the volume increases again. If the stock price is already above the 10-day moving average at this time, it is more certain that the rally has begun. Therefore, basically the angle we should pay attention to is the volume increase after the volume contraction. Only the volume increase reflects the change in the supply and demand relationship of the stock. Only the increase in the trading volume may make the stock have upward bottom momentum.