How to Buy Limit-Up Stocks? Detailed Guide to the Method

The price limit system is a trading system in the securities market designed to prevent sharp rises and falls in trading prices and to curb excessive speculation. It appropriately restricts the daily price fluctuation range of each security, stipulating that the maximum fluctuation range of the trading price within a trading day is a certain percentage above or below the previous trading day's closing price, that is, it sets the highest and lowest trading prices for the day. Now let's take a look at how to buy limit-up stocks!

Can You Still Buy a Stock That Has Hit the Limit Up?

Some limit-up stocks can be bought, but others cannot. It mainly depends on whether the main force can lock the limit up firmly. If you want to buy, you can wait for the limit-up board to open and see whether you can get in. The main difference between China's price limit system and foreign systems is that after the stock price reaches the limit, trading does not stop completely. Trades at or within the limit price can still continue until the market closes for the day. If a stock hits the limit up on shrinking volume or goes limit-up in a single straight line, it is very hard to buy. If it hits the limit up on huge volume, you still need to consider whether to buy, since the main force may be distributing shares.

How to Buy Limit-Up Stocks?

1. Choose the right type of stock: "The real work is done before the market opens, not during the session." In principle, for the limit-up board you plan to chase, choose a type of stock you are familiar with. If you are not familiar with the type, you must still do the necessary research before chasing it so that you know what you are doing. Only when you have clearly understood the fundamentals of the stock you are about to buy before chasing it can you stay calm and operate with ease.

2. Choose the right timing: When choosing the timing for limit-up stocks, you must buy at the first moment (the first limit-up board), buy at the early stage of the move (try not to buy at the limit-up price), and buy at the open or during a sharp drop (not during a rapid surge).

3. Keep your target clear: The limit-up boards you chase are often full of variables. But no matter how things change, the target must not change. If the plan is to "exit after one board," then you must "exit after one board"; if it is "exit after two boards," then you must "exit after two boards." Above all, do not obsess over gains and losses and miss a good opportunity. While setting a clear profit target, you must also set a "stop loss."

4. Make a meticulous plan

① Control the total amount. Do not have the mindset of risking everything on a single throw or treating it as a gamble. On the basis of ensuring that the main position is "safe," use a small amount of funds to chase limit-up boards.

② Buy in batches. Generally, on the first chase you can buy one-third to one-half; do not buy it all at once, so that if the price falls you still have funds to add to the position and avoid being put in a passive position.

③ Buy more as it falls. Since you dare to chase the rise when it surges, you should be even bolder in adding to your position on a pullback. Many people dare to chase when it rises, but do not dare to buy or do not know how to buy when it falls. The main reason lies in an unstable mindset and a poorly thought-out plan.

What Points Should Be Noted When Buying Limit-Up Stocks?

1. In an extremely strong market, especially when about 5 stocks hit the limit up every day, you should boldly chase limit-up boards. In an extremely weak market, never chase limit-up boards; the probability is relatively lower.

2. When chasing limit-up boards, choose new stocks with a theme that have consolidated slightly for several days after listing and then suddenly gapped up and hit the limit up on a certain day. Next, choose stocks whose prices have long been consolidating at the bottom and that hit the limit up without having risen sharply before. Choose strong stocks that hit the limit up after a period of upward movement followed by a strong consolidation that has ended.

3. It must be at the limit up. When it has not reached the limit up (not even one cent short), do not chase. Once you find that the main force is pushing into the limit-up board with an order of three digits or more, chase in immediately. The action must be fast and ruthless.

4. You must stick to this operating style and not waver. Otherwise, when the market has no limit-up stocks, your itchy hands may lead you to step into other stocks and get trapped, causing you to lose the chance to strike.

5. During the session, promptly search the gainers ranking. For stocks approaching the limit up, check their current price, earlier trend and circulating share size to determine whether they can be an entry target. When the gain reaches 9% or more, you should be ready to buy, in case the main force locks the limit up with a large order and you cannot get in.

6. The trading volume released by the stock you chase that day must not be too large. Generally, 1 to 2 times that of the previous day is appropriate. This can be roughly calculated half an hour after the market opens that day.

7. When the whole sector starts moving, chase the one that hit the limit up first, that is, the leader. This is especially true in a big bull market or an extremely strong market. If you are going to chase, chase the first one to hit the limit up.