Hexun Investment Advisor Cao Bing: Turnover rate and volume ratio mnemonic, understand the next day's rise and fall in three seconds

Predicting whether a stock will rise or fall the next day doesn’t require complex analysis. The key lies in the combined use of two genuine indicators: volume ratio and turnover rate. The volume ratio reflects the day’s market activity compared to previous periods, while the turnover rate verifies the authenticity of transactions. Together, they help identify genuine fund movements.

Four practical rules can be directly applied:

1. If the turnover rate is above 5% and the volume ratio is between 2 and 3, it signals a true stock initiation. You can confidently buy at the open.

2. If the turnover rate is between 5% and 10% and the volume ratio is between 3 and 5, market activity is saturated. This is likely a precursor to a main upward wave, so seize the opportunity to buy.

3. If the turnover rate exceeds 10% and the volume ratio is above 5, assess the stock’s price position. At low levels, it may be institutional accumulation—consider buying. At high levels, it indicates potential distribution—consider exiting.

4. If the turnover rate is close to 5% but the volume ratio is below 2, the turnover isn’t low but the volume ratio lags behind. This often occurs at the end of an uptrend or when major players are quietly selling off. It’s best to sell quickly.

Stock trading safety comes first. Understanding is easy, but acting is hard. Strictly align knowledge and action.