ATFXWhat is an oversold rebound, investing away from fraud

Overfall rebound is a term used to describe the trend of stock prices. Investors who have recently entered the market may not be familiar with this term. So what is an oversold rebound?

What is an oversold rebound?

The stock price is the result of a game between buyers and sellers. Generally speaking, stocks will first rise and then fall, and then rebound after exceeding the limit. Overfall rebound is a market rise caused by a stock falling below the normal range. Of course, this market will not last for a long time, but rather a short-term market. In such situations, investors seize a good opportunity to rebound stocks due to oversold. Because oversold means that investors entering the market have lower stock prices, and once they rise, there is great profit potential. However, the premise is that you can distinguish whether the stock is in a period of oversold and rebound.

Will stocks rebound after oversold?

Not all stocks will rebound after oversold. The first condition for a stock to overshoot and rebound is that the stock must be relatively strong in the early stage, and a strong stock usually has the concept of funds repeatedly speculating to raise the stock price. There is also the concept of repeated speculation, preferably in a place where the main funds gather in the market.

Investors must set up stop loss and stop profit settings when oversold. Once the stock price shows a downward trend, regardless of profit or loss, it is necessary to sell the stock in a timely manner. Overfall rebound is only the main self rescue behavior during the decline, so investors do not have to have high expectations for the price rebound. If the main force has the ability to raise the stock price, then there is no need to let the stock price fall so much before self rescue.

How long does it usually take for an oversold rebound to rise?

Generally speaking, the oversold rebound lasts for one or two weeks. But specific analysis is needed for individual stocks, as some stocks may rebound in a short period of time, such as a few trading days;Some stocks have a longer rebound time, such as more than ten trading days. But when the oversold stock rises to a certain extent, due to bearish sentiment, the seller outweighs the buyer, and the stock price will turn down. Therefore, the most important thing for an oversold rebound is to seize the opportunity. Once an oversold rebound occurs, the risk of catching up increases.

A rebound does not mean a long-term final bull market, but a one-time market trend. The reason why oversold rebound is extracted from various rises is that it should have a certain scale, but its time cycle is roughly limited to a short-term range.

Generally2Week or shorter,4A weekly or longer time scale is used to distinguish between the mid line and the short line, in order to understand the rebound line between the short line and the Chinese Super League. In other words, a short-term online rise that lasts for one or two weeks is only caused by excessive stock price decline, and is called an oversold rebound.

Tips for short term rebound grabbing

1.Use the moving average system to rebound.

Stock price in the medium term60Strong rebound near the daily line. Usually, it indicates that there are main funds operating, as the deep intervention of the main force often results in a relatively short range and time of pullback for such stocks, with a large rebound space!

2.usekLine combination grabs rebound

Requires a certain level of technical research skills, especially forkLine combination research, which requires higher requirements!

Overfall rebound should follow the following principles

1.Fast in and out, quick decision-making.

This is mainly aimed at some individuals who have experienced a significant increase in the short term, but have experienced a significant decline of over one or two days15%Of stocks. Because the amplitude of these stocks is huge, they have both high profits and high risks. Seizing this rebound requires boldness and caution. Those who lack technology and experience should not seize it.

2.Set stop loss and stop gain positions.

The purpose of stopping losses is to prevent losses from expanding due to misjudgment. The general stop loss price is10%Within, the profit is sufficient when stopping and winning. Because the rebound itself has short-term significance, we cannot expect too much. One or two days10%A profit of around is enough. However, if the stock does not rebound, it will continue to rise, so it is wise to continue holding positions.

Due to the fleeting opportunity for oversold rebound trading, investors need to be decisive, not only when buying, but also when selling. Hesitation is a taboo in participating in a rebound market. If there is a mistake in catching a rebound, it must be sold out. Active rebound operations cannot be turned into passive midline or long-term covering.