Stock Trading (Short-term Rules)

1. Five-Day Moving Average

The five-day moving average is the lifeline and a key support level for short-term market trends; a break below indicates a correction. The cycle is measured in weeks; holding above it maintains a short-term safety margin.

2. Volume Increase

Volume increase reflects divergence: a surge in volume at high levels (short-term gains over 30%) warns of a pullback; volume increase at low levels may signal a reversal.

3. Trend

Trend is the core principle; the essence is to follow the trend. The sixty-day moving average is the trend boundary—above it is upward, below it is downward. When the trend changes, act decisively according to the new trend.

4. Price and Volume

Stocks with a trading volume below 100 million and a turnover rate under 5% are not considered; only active stocks have enough opportunities.

5. Short-term Trading

Hold stocks for 2-3 days, generally no more than a week. The key is quick in and out; avoid long-term holding.

6. Stock Selection

Only trade stocks in an upward trend; do not chase rising stocks or buy at the bottom. Focus on popular sectors and strong stocks; avoid inactive stocks. Going with the trend is the key.