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How to treat transaction-intensive areas?
When observing the K-line, we will find that in most rising or falling trends, there will never be a region with more transactions, or the stock price will stay in a certain range for a long time. This is what we often call a transaction-intensive area. Because of the intensive trading area, we can understand it as a place where many investors open positions, so the resistance will be even greater during this period. What about the transaction-intensive area? We often use the transaction-intensive area as the pressure line/support line. When the stock price rises, the transaction-intensive area above it is the pressure on it. When the stock price falls, the transaction-intensive area below it plays a supporting role. It should be noted that there is no effective short-selling mechanism in the A-share market, so the effect is not as good as that of futures and other products when putting pressure on stock prices in transaction-intensive areas. Transaction-intensive areas indicate that the effect of pressure and support is affected by turnover rate. If the turnover rate in the transaction-intensive area increases obviously after a period of time, the effect of the transaction-intensive area will be discounted. After many people are locked up, they will not stick to their guns, but will ship and exchange shares. At this time, the role of transaction-intensive areas will be weakened.