From a purely technical point of view, the stock price is determined by the concentration of chips, market capital and the degree of selling pressure. The constant changes of the three are reflected in the relationship between volume and price, which dynamically determines the trend of individual stocks and market prices. Trading volume is the internal driving force of stock price changes, and its changes must be reflected in the stock price. How to understand the real chip collection situation according to the changes in trading volume, and how to use it in practice?
Squeeze and Accumulate
Due to the scattered chips in the early stage, the cost of holding positions is widely distributed, and the main effort is to create various illusions, forcing retail investors to spit out the cheap chips in their hands at low prices. Therefore, in the sub-bottom area, the main force often releases all kinds of bad news, or creates a short structure in form, with the intention of causing psychological panic in the market, causing the stock price to fall, and forcing retail investors to spit out cheap chips at a low price.
When individual stocks rise, they increase their volume significantly, and when they fall, they shrink sharply, which will become the main theme of trading volume changes in the opening stage. Although in many cases, the main action of accumulating funds will be relatively hidden, and the regularity of changes in trading volume is not obvious, but it is not invisible. Judging from the K-line combination, the phenomenon of heavy volume stagnation and shrinking volume is often seen, but the trading volume has always remained at a relatively active level, and began to shrink after one to two months. The main chips continue to increase, and they tend to control the stock price trend through various means at the close, thereby reversing some technical indicators to confuse ordinary investors.
The main force to accumulate chips must lower the buying price, filter out the jumping trading volume of stock prices through technical means, and observe the time-sharing charts in 15 minutes, 30 minutes, and 60 minutes to understand the real concentration of chips. Because the main force no matter how to cover up, to concentrate the chips is the fundamental goal. The accumulation of trading volume is the basis for judging the main construction cost area. Those stocks that have just broken through the important hold-up area in history and have accumulated a record high volume are very worthy of attention. If there is no large space in the market outlook, big funds will not easily unwind for the funds on the market. The higher the accumulated trading volume and turnover rate of the main force in a certain area, the more sufficient the accumulation of the main force’s chips, and the greater the space for the stock price to rise in the future.
Due to the active intervention of the main force, the originally dull stocks became active due to the obvious enlargement of the trading volume, and there was a trend of increasing price and volume. In order to smooth the obstacles for the subsequent sharp rise, the main force conducts the dishwashing, which is manifested as sideways oscillations of yin and yang on the K-line chart. The purpose of the main force is to get ordinary investors out, and the K-line shape of the stock price often becomes an obvious “head shape”.
In the stage of the main force shuffling, the K-line combination is often a continuous overcast line, or a continuous small overcast line, and it seems that the main force is selling out. Even if it falls back in an instant, it will quickly rise and hit a new high in the near future, which shows that from the perspective of volume and energy alone, the stock price has the conditions to rise.
Before a single stock rises, it will experience a number of sell-offs. In the process of shuffling the market, the dealer often uses the method of flipping the stock price to lower the stock price shortly after the opening of the market to test the amount of floating chips in the market. If a large number of sell-offs are immediately attracted, it means that the stock holding mentality in the market is unstable and there are many floating chips, which is not conducive to the bookmaker to push up the stock price. No bigger selling was elicited, the stock price only fell slightly, and the trading volume shrank rapidly, indicating that the stockholders’ mentality in the market was stable and there were no large floating chips. In the wash-off stage, the daily price and volume performance tends to be disordered, the stock price shows a horizontal order or a gradual decline, and the moving average system is re-bonded or even a dead cross.