Financial encyclopedia

The relationship between quantity and price determines whether it is worth investing.

Many investors will judge whether a product/stock is worth investing from the price volume, that is, the relationship between quantity and price. It can be roughly divided into the following three categories:

Relationship between quantity and price of trend type:

1. Increase in volume and price: It means that the market is active and attracts many new buyers.

2. Volume contraction and price decline: it means that both the price and the volume of transactions continue to decrease, and the market is deserted, with a trend of continuous weakening.

Deviation of quantity and price:

1. Volume decreases and price increases: it is a trend at the beginning of the trend, but if it appears in a trend that has already increased for a long period, it means that the transaction decreases and the future trend may weaken and reverse downward.

2. Volume increase and price decrease: the contradiction between the two parties may form a strong selling pressure if it is at the beginning of the downward trend, but if it is after a period of sharp decline, it may be a reversal of the upward signal.

Consolidation or unclear volume-price relationship:

1. Quantity parity rises: kinetic energy may not last for a long time, and it is easy to enter the consolidation period.

2. Volume parity decline: it means that the trend is downward but there is a certain degree of continuous trading, and the trend is in a less clear consolidation.

3. Price increase and price leveling: It means that there may be rising opportunities for buyers and sellers to pull hard. But if the breakthrough goes up or down, it may form a new trend.

4. Quantity parity: buyers and sellers are in a wait-and-see atmosphere with high uncertainty.

5. Volume reduction and price leveling: the price changes little, the transaction volume decreases, and the future uncertainty is high.

Pay attention to whether the product/stock price is worth investing, and consider other factors besides the relationship between quantity and price in order to evaluate it effectively.