What Does a High Stock Turnover Rate Indicate?

A high turnover rate indicates that: the stock has a low lock-up rate.
If a stock normally does not have a high turnover rate and only suddenly rises on certain days, it is a case of a sudden increase in volume. The situation is similar to a volume ratio much greater than 1.
If the stock has a high turnover rate for a long period of time, some say it is a sign that this stock is active.

This is because if a strong banker does a stock, it won't have nothing to do with the left hand pouring the right hand every day, the left hand pouring the right hand will generally only be used at critical times to create a fake. In other words, if a banker holds a large number of shares of the stock, generally is not a large number of in and out every day, these stocks in their hands will generally play a "lock-up" role. The usual turnover rate is regularly high, that is, the lock-up degree is not high, if there is a banker, the banker holds the proportion of shares is not very high. This kind of stock is characterized by being more active. Because the number of shares held by the banker is not particularly high anyway, they like to get in and out to earn the spread.

In contrast, if a stock has a low turnover rate , it means that the banker has a very high degree of control. And most of the chips in the hands of the banker is only used to lock up the position, not much really out of circulation. The characteristics of this kind of stock is relatively smooth, relatively low risk, of course, the return is also relatively small. However, this kind of stock is also very powerful when it is launched, and in the short term, the banker can move as he wants them to move. Especially if you want them to fall, no one can help you up. These stocks have a long-term perspective and do not move in and out of the market on a regular basis. If they want to get out, it's not that easy, no one can catch such a big plate, but it's easy to cause a violent change in the plate.

When it comes to the actual operation, the indicator of turnover rate is not very meaningful. But you can refer to this indicator to choose the appropriate analysis period. For example, a 5% turnover rate means that a complete change of hands can be completed in 20 days. So when analyzing, just look at shorter averages and K-line cycles, usually the 20-day 30-day average is sufficient. If a stock has a 1% turnover rate, that means 100 days to complete a change of hands, 100 trading days is 5 months, this kind of stock, to see its trend should use a longer period line, such as the 60-day average, 120-day average, etc. Of course, this is not exactly the way to apply, because as I said earlier, to take into account the lock-up factor, the trend cycle chosen is shorter than the actual one, and does not exclude some people in and out, out and in. But stocks are a vague art, so there is no need to go into that much detail.