Stock Trading Core Technology System Compilation (Limited Edition)

1. Market Trend Reversal and Strength/Weakness Identification [Taogu Ba]

The core method is to analyze the main buying (red) and main selling (green) funds in the intraday chart to determine the strength of bulls and bears and identify market turning points. The key is to compare the intervals of fund absorption and selling pressure, starting with the big market move on September 24, 2024.

1. Bearish dominance: The intraday chart shows significantly more green (main sell) than red (main buy), with no clear absorption, indicating a downward trend, as seen on the 2024.9.13 chart.

2. Near-bottom signal: After a long bearish phase, there is a stage of large main buy absorption, such as the large absorption in the afternoon of 2024.9.18, warning of a bottom approaching.

3. Bullish reversal confirmation: The intraday chart shows continuous dominance of main buy, even concentrated large buy orders, with K-line above the 5-day moving average, such as from 2024.9.19 to 9.23, indicating bulls have won, signaling the start of a new rally.
   ①, 9.19: Large main buy, first day above the 5-day moving average, bulls win.

②, 9.20: Large buy at the close, second day above the 5-day moving average, bulls win.

③, 9.23: Still large main buy, above the 5-day moving average, bulls win, accumulating a lot of chips for this round of rally.

4. Market opens on 9.24, marking the largest bull market rally since inception
   ①, The index rises by 4 points that day, with almost all focus on large main buy orders, ignoring main sell orders.

②, On 9.25, the market becomes extremely crazy, retail investors are caught off guard, confused, and bullish and bearish forces stagnate for a day.

③, On 9.26, bulls continue to push strongly, market is jubilant, immersed in daily profit-taking scenes.

④, On 9.27, aggressive comments about the internet and others accelerate this rally, bulls keep pushing.

⑤, On 9.30, bulls continue to push, sentiment reaches frenzy, investors open accounts daily to hit limit-ups, making several times their lifetime earnings in days, new retail investors queue up to open accounts.

⑥, After National Day on 10.8, the market opens high but then declines sharply with huge volume, a 300-point amplitude, as many new retail investors absorb the dips, holding the market but with large profit-taking.

5. Bull weakening and formation of a trading range: During the bull trend, main buy orders gradually decrease, and the forces of bulls and bears repeatedly battle, causing fluctuations and forming a range, such as after 2024.10.8, when bulls weaken, and from 10.9 to 10.11, the market oscillates within a range.

This rally reached a high point without prior signs. I used a progress bar to inform the market, and on 9.23 I publicly said we are close to 99% of the bottom, advising everyone not to leave and hold tight. None of my followers who saw my view sold at this point; they all enjoyed the limit-up gains, while many retail investors who cut early had already handed over their chips to the market. They chased the high later, got trapped for half a year, then cut again during the oscillation, learning a heavy lesson. Of course, I also used other technical indicators to judge, but the general rule is that any turning point in bull or bear markets must show clear fund supply and demand signals, which can help precisely identify short-term bottoms or tops.

2. Core Mnemonic for Volume-Price Relationship (Practical Must-Know)

Volume-price relationship is the core of stock trading. Trading volume is the real money, uncontrollable by manipulation. Combining the mnemonic, you can quickly judge the trend. There are ten rules, divided into trend and position judgments:

1. Shrinking volume with rising price indicates continued rise later.
2. During a downward trend on the left side, shrinking volume with falling price suggests further decline (persistent decline).
3. Low-volume at lows indicates good prospects (main force accumulating at the bottom).
4. High-volume at highs suggests caution (main force distributing).
5. Massive volume at lows, with price rising, indicates a pullback (main force shaking out).
6. Massive volume at highs, with price rising, indicates a decline (main force confirming distribution).
7. Shrinking volume at lows without falling further suggests approaching the bottom (good for bottom fishing).
8. Volume and price rise together at the bottom indicates trend formation (healthy upward trend).
9. Shrinking volume at the top with falling price suggests new highs are possible later.
10. Volume surges at the top with falling price indicates difficulty in making new highs (avoid buying at huge volume tops).

3. Building a Short-term Trading System (Key for Beginners to Experts)

Stock trading is fundamentally a psychological game against human nature. Establishing a strict trading system is key to stable profits. The core includes 8 principles balancing risk control and practicality:

1. Contrarian thinking: operate opposite to market sentiment; be cautious when others are greedy, watch when others panic.
2. Capital allocation: divide funds into 5 parts (or 10 for large capital), using only 1/5 each time; set tight stop-loss/take-profit at 10 points; if 5 consecutive errors, only lose 10%, suitable for new traders.
3. Correct adding positions: judge bottoms before adding; add on shrinking volume dips; avoid adding during violent declines; gradually add from left to right, do not blindly add full position.
4. Rational bottom fishing: don’t call the bottom for weak stocks; don’t call the top for strong stocks; avoid blindly bottom-fishing during sharp declines—70% of retail investors get trapped this way.
5. Recognize main force movements: use 20-day moving average as core reference; above it, likely to start a main rally; below, main force is shaking out and accumulating; only after accumulation will they push higher.
6. Correct chasing and selling: don’t chase blindly; buy at trend initiation, sell when trend breaks; need solid technical support.
7. Weekly review: analyze market rotation, sector divergence, eliminate one-day hot sectors, identify main themes for next week’s opportunities.
8. Strictly follow the plan: set a plan after confirming a stock; execute regardless of profit or loss; stay optimistic and avoid short-term market emotions.

4. Turnover Rate Practical Skills (Key to Seeing Price Movements Clearly)

Turnover rate and volume move together, reflecting trading activity. Combining the value with price position helps accurately identify main force absorption, shakeouts, and distribution. Core includes score ranges and special signals:

（一）Turnover rate value ranges

1. <1%: Very low activity, only retail trading, no main force focus.
2. 1%-4%: Moderate activity, normal trading stock.
3. 4%-7%: Relatively active, market popularity, funds involved.
4. 7%-15%: Extremely active, main funds involved, often hot sector stocks, strong profit effect.

5. 15%: Overly active, high probability of main force distribution, be cautious.

（二）Core mnemonic and special signals

1. Core rule: low turnover at lows indicates consolidation; high turnover at lows indicates initiation; low turnover at highs suggests locking positions; high turnover at highs indicates distribution.
2. Death turnover: single-day turnover >70%, major shareholder changes, >80% chance of big drop next day—avoid trading.
3. Distribution turnover: high turnover >25% at highs with a bearish candle, main force distributing chips to retail; watch for trend breaks, often with stealthy attacks on limit-up stocks.
4. Shakeout/rally turnover: during shakeouts, low turnover (retail out, main in); during rallies, shrinking turnover (main force has enough chips, easy to push).
5. New stock turnover: after listing, turnover reaches 52%, main force has accumulated; subsequent turnover >20%, no new lows, closing with a bullish candle, likely to surge later.

5. Practical Application of the 250-day Moving Average (Bull-Bear Boundary)

The 250-day moving average (year line) reflects the average cost over 250 days and is a key boundary between bull and bear markets, mainly providing support/resistance. It should be used with 30/60/120-day averages; not standalone. Core judgment includes:

（一）Setting the year line

Right-click to set the moving average to 250 days.

（二）Bull-bear transition judgment (key signal for bull market)

A volume-supported breakout above the 250-day MA, with the MA turning upward, signals a bull market; even if the price retraces, the decline is limited, indicating a shakeout.
Bullish pattern features:

1. Long-term decline in price and 250-day MA.
2. Price oscillates at lows, trend change, MA slowdown.
3. Volume increases on breakout above 250-day MA, price stays above it.
4. During pullbacks, volume shrinks, selling pressure minimal.
5. Price resumes rising with volume, confirming bottom.

（三）Conditions for a big bull stock on the year line

Being above the 250-day MA doesn’t guarantee a big rise; must also meet:

1. Company in sunrise industry;
2. Industry leader (hidden champion);
3. Significant reduction in shareholder count, chips concentrated with main force;
4. Institutional research and main force entering.

Images:
Image 1: Orange line is the 250-day bull-bear boundary; K-line is above this line for about 2 months. The volume line below shows a yellow horizontal line crossing the chart, also marking the boundary. Recently, the index has stayed above the boundary.
Image 2: A certain stock, with the orange line as the 250-day boundary; the K-line has broken above it for a while, indicating a strong trend and a big bull run. Volume below also stays above the boundary, confirming an upward trend.

（四）Practical buy-sell tips for the year line

1. Buying:
   ① First breakout above the year line with a large or medium-sized bullish candle;
   ② After breakout, pull back to the 5-day MA, consolidate near the year line with small candles, volume shrinks, then follow with volume expansion;
   ③ When the price stops falling and rebounds from high levels near the year line, consider buying.

2. Selling:
   When the price effectively breaks below the 250-day MA, exit immediately to avoid deep losses.

（五）Stock selection based on the year line

Prefer stocks with deep previous declines and long correction periods; short-term oscillating stocks are less meaningful. The year line is suitable for long-term holdings over a year.