Introduction: Investing is a game about the odds, which requires us to calculate the risk-reward ratio of each transaction, judge whether it is cost-effective, and invest the money we can afford to risk. For successful investors, rich trading experience is one of the key factors that determine the success or failure of an investment. In the a** field, it is often seen"Volume**"with"Shrinkage**"These two phenomena, however, most investors are confused about the meaning and difference between these two phenomena.
Moderate volume refers to a sudden slight increase in trading volume after a sustained downturn, and the pattern looks like a continuous and moderate volume pattern, also known as"Mountain"or"Two piles"。This pattern usually indicates that there is strong money in the market. If it appears at the bottom of **"Gentle and generous", often follows, and when the equivalent shrinks, it adjusts appropriately. However, the timing of the adjustment is not accurate, but after the adjustment period, the speed of the adjustment will be accelerated. Therefore, investors should not be surprised by the appearance"Gentle and generous"Enter the market immediately, but should enter the market only on the premise that the adjustment range of ** is not lower than the previous low point of the volume. If the correction is lower than the cost of opening a position, the market may experience excessive selling pressure, and the possibility of another correction in the market is high.
The appearance of a moderate volume pattern can be seen as a sign of the market. When a ** has experienced a continuous downturn, there is a sudden round of small volume, which may mean the intervention of strength funds. Strength funds usually intervene at the bottom of the market and will choose those with development potential. Although the emergence of moderate volume indicates the stabilization of the market, investors should not blindly follow suit. Only when the adjustment range is not lower than the previous low point of the volume, the entry should be entered. Otherwise, once the adjustment is lower than the cost of opening a position, the market selling pressure is too large, and the possibility of another adjustment in the market will be very high. Therefore, investors need to reasonably control risks and choose a suitable operation strategy.
Drawdown refers to the shrinkage of volume, with only a few trades. This shows that most people in the market have the same view of the market outlook. Either it is bearish on the market outlook, resulting in only people throwing out and no one entering the market;Either they are optimistic about the market outlook, and only people enter the market and no one throws out. Usually, this phenomenon occurs in the middle of a trend. If the stock price is shrinking**, investors should sell decisively. And when the shrinkage reaches a certain level and begins to show a large volume**, you can consider entering the market.
Shrinkage often means that the market wait-and-see sentiment is enhanced, and the long and short views are consistent. When the stock price shrinks during a relatively stable phase, it usually indicates that there is no significant divergence among investors in the market about the market outlook. In this case, most people are waiting for a clearer signal before intervening in the market. Therefore, investors should remain cautious and be aware of further changes in the market. When the shrinkage reaches a certain level, there is a large volume**, which may mean that there is a major capital involved in the stock, and investors should pay special attention.
Volume usually occurs at the turning point of the trend, reflecting the divergence of different forces in the market for the market outlook. On the one hand, there is a tendency to throw **;On the other hand, there are people who make an effort to absorb chips. Compared with shrinkage, there is more moisture in the large-scale market. If there are people in the market who have enough chips, they can use those chips to drive large swings in the stock price. After the equivalent can reach the limit, the situation of volume ** indicates that the market has experienced a long period of **, and the volume can shrink to near the historical bottom average. At this time, the stock price is fluctuating less and less, the trading is thin, and no one is interested in the stock anymore. However, when the main force enters the market, the volume can be gradually amplified, or even released in large quantities, which may indicate that the main force is actively involved in the stock. In this case, ordinary investors should pay special attention.
The emergence of volume usually indicates the divergence of market forces and the possibility of reversal. When the stock price increases after a continuous **, it means that there are different forces in the market for the outlook of the market. On the one hand, someone chooses to throw **;On the other hand, some people are optimistic about the market outlook and are trying to attract chips. This confrontation of forces can lead to large fluctuations in stock prices, and after the volume reaches its limit, it is possible to trigger a reversal in the market. Therefore, investors should pay special attention to the volume increase and analyze and judge it in combination with other technical indicators.
Summary: In the a** field, it often appears"Volume**"with"Shrinkage**"These two phenomena. A moderate increase usually indicates that the market is accumulating momentum, and there is a possibility of the market outlookThe shrinkage indicates that the market has a strong wait-and-see sentiment and the long and short views are consistent. Volume is often a sign that there is a divergence of forces and the possibility of a reversal in the market. Investors should analyze and judge according to different situations, combined with other technical indicators, and formulate their own operation strategies.