NEW YORK, March 20, 2023 /PRNewswire/ -- Here is a report from Globalnewsonline:
Mr. Huang Shancheng, an investment expert, combined with his previous option investment experience, summarizes a set of his own technical trading system "Inflection Point Resonance Potential Tactics". He analyses the fate of retail investors repeatedly plundered by major investors in the opaque financial environment. He hopes to help them succeed in making profits in the stock market.
Retail investors overbuy and oversell
The Herd Effect, as is known to all investors in the stock market, is where there are too many retail investors, and this stock price is not easy to increase. It is difficult to sail when a bunch of retail investors is on board, and then invisible selling pressure may arise. Therefore, do not follow the trend, and take this as a criterion for entry and exit: do not buy stocks mainly bought by retail investors because there are too many variables.
Globalnewsonline report: The Herd Effect, which highlights the impact of market sentiment on the stock market, is a well-known concept in the investment community. When many retail investors are chasing the same stock, the affected market sentiment can make the stock price spiral out of control or even plunge. Hence, the criterion is emphasized again here: do not buy stocks mainly bought by retail investors because there are too many variables.
Investment decisions should not be based solely on this concept. Investors should evaluate the company's fundamentals, including its financial position, business outlook, management team, industry trends, macroeconomic environment, etc. Only after a thorough evaluation can an informed investment decision be made.
In addition, investors should be clear about their risk tolerance and investment objectives, and develop an investment strategy based on these factors. Different investors have different risk preferences and investment objectives, so you need to choose suitable investment products and investment strategies.
Retail investors make up the majority of the stock market, but they are often ripped off because they lack research and judgment ability and tend to be bamboozled by news and famous talks. If they keep buying a single stock in one day, they can control the stock price. However, they are a small, scattered group of investors with little capital and poor judgment, who may find it difficult to drive up the stock price. This is why it is necessary to follow the operation of major investors and legal persons. That retail investors buy more than the recommended indicator can be regarded as an anti-indicator. As long as you follow the anti-indicator, the possibility of making money is even higher than following legal persons, which is really amazing.
Summary:
Mr. Huang introduces that the movement of retail investors is an important anti-indicator. It is highly likely to suffer losses when you follow them, so you must force yourself to jump out of the circle of retail investors. Retail investors are individual investors who are starved of money and expertise, and they usually follow hot spots or news in the stock market. However, the way the stock market works is often anti-human, and their behavior often results in loss of money.
On the contrary, major investors refer to investors rich in capital and professional knowledge, who usually command the stock market and have a deeper understanding of the factors affecting the stock price. Therefore, following their movement is a more secure approach.
Of course, to follow major investors, you need to have certain investment knowledge and skills, as well as the ability to understand and judge market trends. In addition, it is also necessary for you to be hard-headed so as not to be swayed by market fluctuations and news and not to be caught flat-footed by unexpected risks.
The stock market is a place full of risks and opportunities, and to benefit from it requires corresponding knowledge and skills, as well as a firm mindset and the ability to control risks.
Major and herd shareholdings
Retail investors are dispersed and major investors are concentrated. The latter can buy hundreds of, or even thousands of shares, so their chips are relatively concentrated. However, how to distinguish between major or herd shareholdings?
This concept is similar to the buying and selling relationship between major and retail investors. Only when the two sides stand on the opposite side can rise and fall emerge. Major investors enter the market when they overbuy, but you cannot know the trends of the two sides. There is a shareholding line chart in Leopard Investment, which clearly demonstrates the current shareholding ratios of both sides. The information is updated weekly so that investors can prepare every Saturday for better judgment.
In addition, to distinguish between major and herd shareholdings, Mr. Huang suggests the following methods:
1. Check the shareholder register: The shareholder register of a public company can be found on the company website or the stock exchange website. By checking this, you can find its major shareholders and the proportion of their shares.
2. Observe the trading volume: Major investors usually have a relatively large trading volume, so it is possible to judge whether there are large amounts of in and out by observing the trading volume. A sudden increase in the trading volume of a particular stock and drastic price fluctuation may symbolize their movements.
3. Analyze the chip composition: The chip composition refers to the composition of shareholders. If the stock is high in retail ownership, the stock may be more volatile because retail investors tend to be affected by market sentiment. Conversely, if the stock is major ownership, the stock may be less volatile because major investors are more informed and better at controlling the market.
4. Track public information: Major investors usually disclose their information about shareholdings in annual reports, announcements, etc. By tracking public information, you can understand changes in their shareholdings and make judgments based on this information.
According to Mr. Huang, it takes more information, a certain understanding, and a keen observation of the stock market to distinguish between major and herd shareholdings.
The parameters of major and herd shareholdings can be adjusted. For example, everyone has a different definition of the major investor. Some people think that those who hold 600, 800, or even 1,000 shares can be called major investors, while some people regard the stock price of 50 yuan as a watershed, and those who hold 600 shares over 50 yuan, or 1,000 shares under 50 yuan can be called major investors. Another way is to multiply the stock price by the number of shares, depending on whether you want to use 50 million or 100 million yuan as your ideal standard.
Golden Cross
Mr. Huang says that when major shareholdings exceed herd shareholdings from bottom to top, the major shareholding ratio increases and the chips become concentrated, which is conducive to making profits.
Major shareholding ratio
The ratio of the number of shares held by individuals or legal persons with over 1,000 shares to the number of people.
Herd shareholding ratio
The ratio of the number of shares held by individuals or legal persons with under 100 shares to the number of people.
Death Cross
Mr. Huang introduces that when herd shareholdings exceed major shareholdings from the bottom to top, the herd shareholding ratio increases and the chips become dispersed, which is not conducive to making profits. He advises novice investors to stay out of the market when the death cross appears.
Summary:
1. When the major holding crosses the retail holding from the bottom to the top, it is favorable to increase.
2. When the retail holdings cross the large holdings from the bottom to the top, there is a downward risk.
Is it necessary to follow major investors?
Major investors in the stock market usually refer to large institutional investors, such as fund companies, banks, insurance companies, etc. These institutions usually have more resources and information to better analyze the market and company fundamentals. Therefore, their investment decisions and actions may have a greater impact on the market.
However, following them is not always a good strategy. First of all, they may also make wrong judgments, resulting in investment failure. Second, if everyone follows them, the market may become overbought or oversold, leading to price volatility. In addition, institutional investors tend to have longer investment cycles, and their investment decisions may not fit the short-term trading strategies of individual investors.
Therefore, Mr. Huang points out that investors should make rational investment decisions based on their own investment objectives and risk tolerance. Investors can select stocks with investment value by analyzing the fundamentals and technical aspects of the company. In addition, investors should also formulate their own investment strategies and risk control measures according to their own investment objectives and risk tolerance. In the investment process, investors need to always pay attention to market changes and adjust their investment strategies in time.
Company: Globalnewsonline
Contact Person: Luayy Alkilani
Email: jan@globalnewsonline.info
Website: http://www.globalnewsonline.info/
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