HOW-TO use three turnover musketeers #1 : L5 HSL TrendThe market decides how much profit to give you, and you can decide how much to lose! ---- Linda Bradford Risk
Recently, I have concentrated on the time to summarize and optimize the three tools for turnover: turnover trend, turnover oscillator, and turnover supply and demand; as explained in advance, these three indicators are only suitable for stocks in the A-share market. In TradingView Errors may be reported for other targets. It is planned to introduce their usage in three articles. For those who are not familiar with this indicator, I will briefly introduce the concepts of turnover and turnover in this first article.
Change of hands refers to the transaction in which shares are transferred from Party A to Party B. Turnover rate: refers to the ratio of the trading volume in a certain period of time to the total number of outstanding shares of the stock, which is one of the indicators reflecting the liquidity of the stock. It should be noted here that it must be divided by the circulating market, because the circulating market is real and can be circulated, and it is a bargaining chip that retail investors and main players can buy and sell, so the ruling is more representative. The turnover rate (HSL) is used for market research and judgment to help traders track the activity of individual stocks. Generally, the higher the turnover rate of a stock, the more active the stock is; otherwise, the more sluggish the stock is, The less the market pursuers: when the daily turnover rate is less than 1%, it is called absolute land volume. 1%-3% is called land volume or low volume, 3%-5% is called slightly active, 5%-8% is called volume, 8%-10% is heavy volume, 10%-25% is huge volume, 25 % or more is abnormal transaction.
1. Land volume or downturn indicates that the transaction is relatively inactive; the stock price will generally maintain the original running trend, mostly consolidating or falling, except for the stocks with high control;
2. A little activity and volume indicate that the transaction is active;
3. Heavy volume, huge volume and abnormal transaction indicate that the transaction is warm; if it occurs at a low level, it is likely to be the main purchase; if it occurs at a high level, it is likely to be the main shipment.
There is also a concept of real turnover: in a stock, individual stocks held by controlling shareholders will not be easily traded. We believe that these chips are basically unchanged, and individual stocks held by strategic investors will not Easy to buy and sell, unless there is a larger profit, so this part of the chips is also considered unmoved. Therefore, the real circulating market is the circulating chips displayed on the software minus the stocks held by controlling shareholders and strategic investors. In this way, the turnover rate and willingness to buy and sell can be more realistically reflected. Therefore, whether the turnover rate or the real turnover rate needs to be judged according to its absolute value.
In addition, the turnover rate alone is not comprehensive enough. It is usually necessary to combine the K-line to understand the meaning of the market. The two are complementary. The reduction or enlargement of the turnover rate is of great significance for identifying the candlestick chart. If you don't look at the turnover rate, you can't distinguish the strength of the main force and whether it is really a stock. It cannot effectively follow the main force of the market to make money. Combining the turnover rate with the stock price trend can make a more accurate prediction and judgment on the future stock price. If the turnover rate is high for a long time and within a certain price, it means that the amount of capital in and out is large, and the main capital is sufficient, so that the individual stocks are operable, but if the turnover rate suddenly increases in a very short period of time, such as within a day or two, After that, it suddenly calmed down. This situation is often that after the main players in the market have put out most of their chips, in order to sell out all the remaining chips in their hands, they deliberately use this very small amount of chips to fight against and create the illusion of active trading volume. , and let inexperienced traders follow suit, so that the main force can get rid of the remaining chips smoothly, which will be followed by waves of slumps.
A high turnover rate can indicate that there is an inflow of funds or an outflow of funds. Therefore, the turnover rate is of great significance in judging the stock market. Only from the long-term K-line chart can we see the in and out process of the main market forces. When the inflow and outflow process of market capital can be seen, the relative level of stock price can be identified. When the main force enters the market, the turnover rate is high and the stock price is low, indicating that there is capital inflow; when the main force is shipped, the turnover rate is high and the stock price is high, and there is capital outflow.
The turnover rate trend is the simplest of the three indicators, including two parts, the turnover rate bars marked with different colors and the fast and slow moving averages of the turnover rate. The default parameters are 5 and 10. This parameter is mainly used for the daily market, and you can also configure other values that are more reasonable in the settings. The golden cross and the dead cross of the fast line (red) and slow line (green) of the turnover rate indicate the trend of the turnover rate, but note that this is not the price. It has rich market meaning and does not have a price orientation. It also needs to be judged with the K-line price.
For the turnover bars, there is a percentage on each bar, which is the current day's turnover value, accurate to one decimal place. The color of the bars is a color designation that I always use to provide an illustration of the relationship between the bar combinations in addition to the absolute value of turnover. The colored turnover bars have 6 colors and 5 meanings. Because, the cyan/emerald color is NA, that is, there is no special meaning.
1. Buying and changing hands - a large number of changes, a large price range (the range from the highest price to the lowest price), the positive line (red), the typical K-line pattern is a large positive line with a large number;
2. Selling and changing hands - a large number of hand-changing, a large price range from the highest price to the lowest price), Yinxian (white), the typical K-line pattern is a large Yinxian with a large number;
3. Huge tug-of-saw - a lot of changes, small price range (green), star line, small yin and small yang, with a large amount, the opening and closing prices are relatively close, the typical K-line pattern is a huge amount of doji;
4. The amount of land - the amount of land or changing hands is sluggish (yellow), the amount of shrinkage, the typical K line is the amount of small yang and small yin line;
5. Buy and sell changing hands plus a huge number of hand-changing saws - meet the above 2 conditions (magenta) at the same time. The range of the highest price and the lowest price is large, the range of opening and closing prices is small, and there is a large number of hand changes, that is, a large number with a long upper shadow or a long lower shadow. The typical K line is a large real body with upper and lower shadows. Mostly.
6. In the absence of these special turnover signals, the bar color is cyan or emerald green.
Buying and changing hands: buying and changing hands can reach a climax
Buying and changing hands usually occurs in:
• The beginning of an uptrend (the main force aggressively builds positions and grabs chips);
• The end of the trend (primary pull-ups, retail pick-ups), and;
• Pullback during a downtrend (main force pulls back to sell, shorts replenish, longs bottom).
The beginning of an uptrend is almost always marked by the appearance of buying and selling. This shows that the main force is eager to build positions and grab chips, and a large number of incremental funds enter the market and quickly raise prices. An effective breakthrough should be more bullish power leading to a positive line, but occasionally the K line behind the buying tide will test whether the lowest price of the K line corresponding to the buying tide can support it. If there is no support, it is the short side offside, and you can consider stop loss and exit.
The wave of buying and changing hands (red) at the top of the market is also characterized by the fact that it usually coexists with a huge amount of seesaw (green, long-short competition) or land volume (yellow, buyers are trying their best). A change in trend usually takes a while to develop, so don't get coaxed out too soon - wait for the market to become exhausted (divergence) before taking action. A useful signal to watch is land volume (yellow) - land volume indicates that there is ultimately no demand, so the market may stop moving forward.
During a downtrend, rallies are often characterized by buying and selling. (The main force does not want to sell at a low price, and sells at a high price, creating the illusion of a trend reversal, or showing short-covering chips, or traders constructing a bottom too quickly) Once the volume of buying and changing hands continues to decline, the downward trend may be will continue. When the lowest price of the K-line corresponding to the buying and changing hand tide is below (the short side is offside), it can be confirmed that the downward trend will continue, and those who enter by mistake need to stop loss and exit.
The tide of selling and changing hands: the rate of selling and changing hands reaches a climax
Market behavior is highly dual. There is buy and sell. Selling turnover is basically the opposite of buying turnover. BKVO identifies sell turnover waves by multiplying the sell volume (trading at the bid price) by the price range, then looking for the highest value in the last 8 turnover bars (the default setting). A surge in selling indicates that a large supply has caused prices to fall. The default setting is to set the turnover bar color to white.
The selling tide usually occurs in:
• The beginning of a downtrend (massive shipments of the main force);
• the end of a downtrend (bear trap);
• Pullbacks during an uptrend (shuffle, shock, long replenishment).
The beginning of a downtrend almost always begins with a wave of selling. This shows that the main force is eager to ship, and the chips enter the market in large quantities and quickly push down the price. A valid downside breakout should have more price breakouts (changes move ahead of price), but occasionally a sell-change surge corresponds to the highest price of the candlestick. If the price of the K-line and the turnover rate later break through the highest value of the buying and changing tide, then the yang overcomes the yin, and you can enter the market to open a position.
The characteristic of the selling tide (white) at the bottom of the market is that it coexists with the changing tide (green, long-short competition) or land volume (yellow, sellers do their best). A change in trend usually takes a while to develop, so don't be coaxed into a trade too early - wait until the market becomes exhausted and the bears completely unravel. A useful signal to watch is land volume (yellow) - this indicates that eventually there is no supply and the market may stop falling.
During an uptrend, pullbacks are usually characterized by a wave of selling (white). These indicate profit-taking or the desire of the trader to get to the top quickly. Once the tide of selling and changing hands declines, the uptrend may resume and continue the original uptrend. When the price of the volume column and the K-line of the sell-and-change tide is double-covered, that is, the yang overcomes the yin, and the continuation of the upward trend can be confirmed.
giant saw
Mass saws are usually seen in:
• End of uptrend;
• the end of a downtrend;
• Profit-taking boosted the medium-term trend.
Be
When huge tug-of-war volumes are high, it indicates that demand is being met by new supply of chips or supply is being met by new bottom-chip demand - in fact, as new supply or demand comes into the market, because, price It is impossible to advance, and the range from the highest price to the lowest price of the K line will be very small, so only the turnover rate can observe the market changes. Mass saws are seen as 'brakes'. It's like hitting the brakes - typically, the car will stop shortly thereafter (1-2% points), then turn around. However, at other times, the momentum is so great that all you get is a pause and then the market keeps going in the same direction! This is the difficulty of judging the development of market trends!
It is worth noting that occasionally the trading tide and huge seesaw will overlap. At this time, the color of the turnover rate column is positive red (the buying and selling tide plus the huge seesaw), and its market meaning is also more complicated or vague. unclear.
land change
A change of land is usually seen in:
• End of uptrend;
• the end of a downtrend;
• Mid-term trend pullback.
The volume change (yellow) is my favorite indicator of the turnover rate. They show what retail traders do on candlestick charts. They are also very useful when the market tests tops or bottoms, as indicators that can confirm a change in trend direction.
The colored turnover rate column is an important part of the quantitative knowledge system of Qingmao, and it is an effective aid in the existing and future release indicators. Because they can show turnover indicators that need attention at different market stages:
• The top of the market is characterized by a buying rush (red), huge seesaws (green) and shrinking positives (yellow, also known as testing).
• The bottom of the market is characterized by a surge of selling (white), a huge see-saw (green) and a shrinking volume (yellow, also known as a test).
• Retracements of up or down trends are similar to market tops or bottoms, but with shorter duration and simpler turnover bar colors. Keep in mind that this method of using turnover to identify turning points is even more powerful when combined with non-correlated indicators such as whales and tangles.
NOTE: this indicator can only applied for Stocks. Or it may fail in calculations.
