The turnover rate, also known as the "turnover rate", refers to the frequency with which stocks change hands in the market within a certain period of time. It is one of the indicators that reflects the liquidity of the stock. There are different types of indicators based on the nature of the sample population, such as the total turnover rate of all listed stocks on the exchange, the turnover rate based on the number of issuances of a single stock, and the turnover rate based on the portfolio held by an institution.

Among the many tools of technical analysis, the turnover rate indicator is one of the most important technical indicators that reflects the activity of market trading. Generally speaking, the daily turnover rate of most stocks is 1%-2.5% (excluding newly listed stocks). The turnover rate of 70% of stocks is basically below 3%, and 3% becomes a dividing line.

When the turnover rate of a stock is between 3% and 7%, the stock enters a relatively active state. When the price is between 7% and 10%, it means the emergence of strong stocks, and the stock price is highly active.

Extended information:

The turnover rate in emerging markets is higher than that in mature markets. The fundamental reason is that emerging markets are expanding rapidly, there are more newly listed stocks, and investors have weak investment ideas, which makes emerging markets more actively traded.

A high turnover rate can indicate both capital inflow and capital outflow. Generally speaking, a high turnover rate when the stock price is at a high level will attract the attention of stockholders, and it is likely to be the main force shipping (of course, it may also be the main force building a position).

By combining the turnover rate with the stock price trend, certain predictions and judgments can be made about future stock prices. A sudden increase in the turnover rate and trading volume of a certain stock may mean that investors are buying in large quantities, and the stock price may rise accordingly. If a stock continues to rise for a period, and then the turnover rate rises rapidly, it may mean that some profit-seekers want to cash out, and the stock price may fall.

Baidu Encyclopedia-Turnover Rate