If you want to understand stocks, you can't ignore the turnover rate. I'll be honest, many people have been trading stocks for years and still can't figure out this thing, and the result is often getting completely cut up by the main players.

Let's start with the most straightforward explanation: the turnover rate is the frequency of stock trading, reflecting how active this stock is. A turnover rate of 60% means the stock is being exchanged frequently, with buyers and sellers competing against each other. Buyers think it's a strong stock and should be bought when it dips, while sellers have already made 50% profit and want to exit. So, don't always trust that your decision is correct; think about why the opposite traders are doing what they do. Being biased can be misleading—ask yourself why they act this way. Asking more "why" questions will help you stay rational.

The turnover rate represents different stock states over different ranges. I'll break it down for everyone. 1%-3%: basically, no one cares about this stock; institutions ignore it, and retail funds aren't interested either. It might be a large-cap stock that doesn't move, or the theme is too old. 3%-5%: some tentative positions are being built, but activity is still insufficient. 5%-7%: there’s disagreement between bulls and bears; the stock price slowly climbs, which could indicate the main force quietly accumulating shares.

7%-10%: main players become more active in buying; if the price drops, they might be suppressing the stock or lightly shaking out. 10%-15%: the main force wants to control the market, increasing their accumulation efforts; after accumulating, they start pushing the price up. 15%-20%: trading becomes lively, volatility increases; volume at low levels hints at a prelude to a breakout, while high-volume drops at high levels should raise caution.

20%-30%: fierce battle between bulls and bears. At low levels, the main force might be aggressively accumulating shares to attract retail investors; at high levels, it’s likely distributing. Don't just watch the large orders—today’s main players have learned to split big orders into smaller ones to sell gradually, reducing friction costs and preventing retail investors from crashing the market. 30%-40%: such extremely high turnover rates are usually seen only in hot stocks with explosive themes; main players prefer to accumulate quietly. If the signs are too obvious, prices can be driven up artificially, increasing the cost of building positions. 40%-50%: attention skyrockets, stock prices fluctuate wildly, and most people can't hold on; these stocks carry high risks.

50%-60%: possibly caused by a major news event leading to huge divergence; sellers are usually those who made profits earlier, while buyers are looking to catch the falling knife. 60%-70%: it's already extremely crazy; buyers and sellers are dissing each other. If this occurs at the bottom, it could be a sudden major positive event; at the top, it signals distribution. 70%-80%: off the rails, with huge uncertainty in the stock price. If it drops, don’t catch the falling knife—there might be bad news you don’t know about. 80%-100%: almost all chips are changing hands; such stocks should be observed from afar and not played with.

Regarding the meaning of main force turnover, I’ll go into more detail. Stocks operated by main players over the medium to long term usually have very low turnover rates but keep rising in price. This indicates genuine medium- to long-term institutional operation, with strong continuity and low risk. Conversely, if a stock is moving in a downward channel and suddenly has an extremely low turnover rate, it suggests no one is trading anymore—especially for stocks that had institutional positions built earlier, after some shakeouts. This situation warrants close attention because the stock might already be at the bottom.

But here’s a common trap: does a higher turnover rate mean the stock will rise higher? Not necessarily. When the stock is still climbing, this makes sense. But once the stock has risen significantly and is far from the main force’s cost line, a high turnover rate can actually be a sign of distribution. We often say “massive volume leads to sky-high prices,” which describes this situation.

How to identify main force actions through turnover rate? First, a turnover rate below 3% is very normal, indicating no big funds are operating. A 3%-7% turnover suggests the stock is entering a relatively active phase and should attract attention. A 7%-10% daily turnover rate often appears in strong stocks that are widely followed. If the turnover exceeds 10%-15%, unless it’s at a historical high or peak period, it indicates large institutional operation. If it stays above 15% in a tight trading zone, it shows great potential for further rise and is a technical feature of super-strong main players.

There are also some details worth noting. Pay attention to stocks with consistently high turnover and increasing price and volume—this indicates deep involvement by main players. As the stock price rises, profit-taking and stop-loss selling pressure increase. The more active and thorough the turnover, the more effectively the selling pressure is cleaned out, raising the average cost basis of holders and reducing selling pressure on the way up.

When a stock surges sharply and the turnover rate drops, with the price fluctuating with the market, this often appears in growth stocks. It indicates that a large amount of chips has been locked in, and the main force is operating long-term, with further upward movement expected. A sudden surge in turnover with little price fluctuation is a pre-arranged shakeout, which has research value.

Ultimately, volume expansion at low prices is worth watching, while volume expansion at high prices during a decline is something I personally avoid—especially when stocks are falling continuously, I won’t catch the falling knife. Even if I like a stock, I prefer to enter after it stabilizes from the right side. Be cautious; don’t go against the trend—that’s my respect for it.