The volume price relationship theory is an important tool to analyze the rise and fall of stocks. Making good use of the volume price relationship theory can help us to invest more effectively and obtain higher returns. The following is a brief explanation of the main content of the volume price relationship theory and the method of analyzing stocks. I hope it can help you.
As a classic stock analysis method, the volume price relationship mainly reflects the changes of trading volume and stock price. From the perspective of the change relationship between trading volume and stock price, the volume price relationship usually derives the power law. According to the rise and fall of stock price and the increase and decrease of quantity, it can be divided into quantity price opposition and quantity price deviation.
The opposite of volume and price means that the change direction of stock price and trading volume is the same. When the stock price rises, the trading volume also rises, which is the performance that the market continues to be optimistic. The stock price fell and the trading volume decreased, which shows that the seller is optimistic about the future market, and the position is reluctant to sell. There is still great hope for a turnaround rebound.
2. The price decline and volume contraction mainly refers to a kind of volume price coordination phenomenon that individual stocks or indexes fall at the same time when the trading volume decreases. With the reduction of trading volume, the stock price will continue to fall, and investors should mainly wait and see with money.
The deviation between volume and price is the opposite trend between the stock price and the trading volume. When the stock price rises, the trading volume decreases or remains flat, indicating that this upward trend is difficult to continue, except for the stocks whose market is extremely high. The stock price fell, but the trading volume rose, which was a precursor to the downturn in the future market, indicating that investors were afraid of a catastrophe and sold out of the market.
2. The increase in price decline mainly refers to the combination of price and volume when the trading volume of an individual stock or index increases and the stock price or index falls. The initial high of price decline is a reference selling signal.
A flat price rise means that the trading volume remains at a level, while the stock price or index continues to rise. You can refer to continued position increase. Stocks with flat price rises may continue to rise.
The average price drop means that the trading volume remains at the same level, while the stock price or index continues to decline. At this stage, you should sell your stocks earlier.
The increase in average price means that after the stock price continues to decline, it begins to stop falling and stabilize. The trading volume has obviously changed from shrinking to increasing, indicating that the lower commitment has become stronger. This is a positive turn signal. If the market is bullish in the future, you can refer to a small amount of buying.
Price leveling and volume reduction means that after a long-term sharp rise in the stock price, the trading volume decreases significantly, and the stock price or index is collated horizontally or no longer rising. This is a warning signal for shipment, and it should be noted that the price will fall after a long time.
Average price and average volume means that the stock price or index has stabilized after a long-term decline and is in balance, and the trading volume is also in balance, which means that the bottom of the stock market will be formed, and the short position situation will turn into a long position situation. Shareholders can refer to early position building. If the stock market is not stable after a long-term round of rise, even though the stock price is high and the trading volume is high and balanced, we should be alert that the stock market may change from a long position to a short position, and shareholders should reduce their positions in advance.
