Can I buy at the daily limit? Avoid these 5 investment traps and make you smarter

In Taiwan Stock Exchange and major Asian Securities Market, the daily limit always attracts the attention of many investors. What does it mean when a stock hits the daily limit? Can I buy at the daily limit? This newspaper has specially compiled a number of professional analyses to analyze the "daily limit" phenomenon and point out five common investment traps to help readers improve the wisdom of their investment decisions.

What is the daily limit? "Can I buy stocks at the daily limit?" is the most common question among investors.

Stock price limit and price limit mechanism explanation

Daily LimitIt means that the stock price rises to the maximum increase specified by the competent authority on the same day (for example, the Taiwan stock market is generally 10% of the previous day's closing price), and then no higher price can be traded. This is to prevent excessive stock price fluctuations and protect the investing public.

The following table simplifies the differences between the rise and fall limits of Taiwan stocks and US stocks:

Can I buy at the daily limit? According to current regulations, investors can still place buy orders when the stock price reaches the daily limit, but the probability of a transaction is extremely low. This is because almost all those who are willing to sell have already been traded, and buy orders will pile up at the upper limit price waiting. Sometimes it is impossible to get the goods and the transaction may not be completed all day.

Can I buy at the daily limit? Be careful in your judgment and avoid the five major investment traps

A comprehensive analysis of the five most common traps that investors fall into when it comes to the topic of "Should I buy when the stock price reaches the daily limit?"

Trap 1: Blindly chasing high prices can easily lead to becoming the biggest loser

The skyrocketing stock price attracts attention, and new buyers flock in, but the chips have already been sold to you by early investors. Stock analysis shows that retail investors of 80% enter the market when the stock price reaches the daily limit, and often end up being the last ones to take over.

Trap 2: Ignoring the probability of a deal and the pace of trading

Placing an order to buy stocks at the daily limit seems to give you a chance to earn a second daily limit, but it often takes a long time to come.The number of orders often reaches hundreds or even thousands, when it is your turn, the stock price may have changed.

Common order status table

Trap 3: Simply betting on news without checking the fundamentals

Many investors enter the market directly upon seeing favorable news or daily limit.Ignoring the company’s core business conditions and financial reporting risks. Some daily limit increases are just themes or Main force speculation, lack of long-term support.

Trap 4: Ignoring the concentration of chips and the main force's lifting of shipments

「The main force speculates the daily limit"This is common in Taiwan and Hong Kong stocks. The main funds raise the price to attract retail investors, but in fact it is to make it easier to clear the chips at high levels. If ordinary retail investors participate, they may be trapped and short-term highs may be easily formed.

Trap 5: Not understanding stop loss and capital management

The price limit is not controlled, and the stock price opens high and then goes down, or the stock is sold the next day.Often leads to heavy losses without stop loss.

It is necessary to strictly set stop loss and enter and exit in batches in order to reduce risks.

How should investors deal with the daily limit? Experts teach you the right strategy

1. Calmly analyze the causes of the daily limit

Investors should judge the reason for the daily limit. Is it due to favorable fundamentals or an abnormal temporary suspension of trading?

The following table lists the methods for determining the "limit-up phenomenon type" with a better reputation:

2. Observe the dynamics of chips, foreign capital and legal persons

If a stock that is held in large quantities by major players or big investors has consecutive daily limit increases, you need to be alert to the risk of a head-breaking move. It is recommended to observe the trends of the three major legal entities (foreign capital, investment trusts, and proprietary traders).

3. It is recommended to operate "related concept stocks" or use batch layout

For example: "TSMC" hits the daily limit, then turn to the supply chain such as photomasks and silicon wafer stocks, or wait until the next day to pull back and then make appropriate arrangements in batches to diversify the risk of a single stock.

Comparison of the rise and fall mechanisms of Taiwan and the United States stock markets

New Era of Investment: Learn from Various Investment Tools and Platforms

In the ever-changing financial era, in addition to the stocks themselves, Diversified asset allocation"Improving learning ability" has become a key recommendation of many experts. Investors are advised to make good use of financial technology resources, improve their own financial literacy, and avoid blindly chasing high prices.

Example of investment platforms and learning resources

Note: AffiMarket Easy AllianceIt is an affiliate marketing platform that connects people in and outside of Taiwan, the UK. Through cooperative profit-sharing, it helps promoters (such as bloggers, YouTubers, community managers, etc.) and businesses achieve a win-win situation. Currently, it brings together a variety of products such as travel homestays, e-commerce, AI tools, education, etc. Regardless of capital or experience, anyone can join for free and receive professional alliance marketing teaching and consulting assistance, opening up new and diversified sources of income for individuals.

Faced with the daily limit, how to avoid impulsiveness and unfair investment?

Experts remind that no matter how popular the question "Can I buy at the daily limit?" is, the answer is not just "yes" or "no", but whether you can see through the risks and capital flows behind it.Especially in an era when hot industries such as AI, semiconductors, and new energy have repeatedly hit daily limit, we need to carefully learn to distinguish between reality and illusion and grasp the following principles:

Five fool-proof entry rules:

• Only buy stocks you understand and don't chase prices based solely on news.
• Set a stop loss point and arrange the investment in batches; do not place too much pressure on a single target.
• The risks of special negative factors and sudden delisting must be assessed in advance.
• Try not to chase the first daily limit and wait for the market to cool down.
• Review after-market data and corporate buying and selling activity regularly.

In the ever-changing stock market, facing the dilemma of "can I buy stocks at the daily limit?" is ultimately a test for investors.Rational AnalysisandRisk Managementability. On the road to mature investment, remember to take "avoiding short-term emotional speculation and focusing on long-term industry trends" as your responsibility, so that your assets can steadily appreciate in value without becoming the main ATM. I wish all my readers good luck in their investments and that they will always be in a safe position with information and strategies!