Recently, I've seen many beginners ask how to play short-term trading, so I’ve organized some of my thoughts, hoping to help everyone.

To put it simply, stock short-term trading is buying and selling within a short period, usually completing transactions in a matter of minutes to weeks. Some trade within the same day, some hold positions for a few days. The core goal is to profit from price fluctuations. This is completely different from value investing where you buy and hold for ten years.

I’ve found that many people are initially attracted by the high returns of short-term trading, but the risks are also significant. The key is discipline—knowing when to enter and when to exit. My experience is that a higher win rate is far more important than individual profits. Many experts use backtesting software to verify their trading strategies, and developing this habit is worthwhile.

To find good short-term trading opportunities in stocks, first look at whether the market’s volatility is sufficient and how long it can last. The best opportunities appear in clear trending markets. Second-tier opportunities are in wide-ranging oscillation zones, where volatility isn’t huge but occurs frequently. As long as you grasp the rhythm, you can also accumulate profits steadily. Of course, be cautious of markets with extreme volatility, which can easily lead to margin calls.

The skill of identifying buy and sell points is very important. Many people look at news to catch the bottom or sell at the top, but the market has already reacted by then. My advice is to focus on basic skills: observe the direction of moving averages. If the price is above the moving average and the moving average is trending upward, it indicates an uptrend; the opposite applies as well.

Next, understand the market cycle. It usually goes through four stages: first, oscillating within a range, where bulls and bears test each other; then a breakout occurs, and the price begins a directional move upward or downward; after reaching a high or low, a pullback starts; finally, it enters an uncertain period. During this phase, I usually stay away because it’s hard to predict.

When choosing stocks for short-term trading, I look at three points: first, whether there is a theme or news that the market is paying attention to; second, whether the trading volume is large enough for easy entry and exit; third, whether the stock price is highly volatile, providing profit potential. Fundamental analysis isn’t that important here because short-term trading can go long or short; the focus is on technical analysis and volume.

In my practical experience, I often use a few routines: when the stock price just starts to rise, the gains are small, the moving averages are diverging upward, and the daily turnover rate is around 3%, I wait for the price to pull back to the 5-day moving average before buying. Or, when the market is falling but a certain stock is rising against the trend by over 5% with increased volume, that’s also worth attention. Another scenario is a stock that surges quickly and then drops sharply with decreasing volume; when the decline reaches half of the previous gain, I jump in to catch the rebound.

If the monthly and weekly charts are at low levels, with volume stacking, the 60-minute chart shows a golden cross with volume increasing, and continuous volume expansion at the price level, it indicates the stock is in a hot sector just starting up. This is a good time for short-term entry. But the most critical point is to cut losses immediately if your judgment is wrong—don’t hold onto hope. Conversely, once the price hits your psychological target, take profits immediately—don’t be greedy.

The biggest risk in short-term stock trading is losing control of your emotions. I’ve seen too many people make money on demo accounts but lose everything in real trading because their mindset collapses. So, it’s essential to control emotions, manage capital well, view losses correctly, and always prioritize risk management.

Finally, I want to emphasize that technical analysis is especially important here. The market always looks forward and reacts to current events. So regardless of the fundamentals, short-term trading relies more on reading technical signals, identifying support and resistance levels, and following the trend. Only when prices fluctuate significantly in a favorable direction can profits be made. Although high-frequency and seemingly lucrative, short-term trading is quite challenging and requires continuous learning and practice.