Selling (Exiting) An Investment

[winston]

Know When to Fold’em: When Is the Right Time to Sell a Stock? By Larry D. Spears, Money Morning


Nine Good Reasons for Selling a Stock

1. Sell when the reason you purchased the stock in the first place no longer applies.

2. Sell if the stock's not keeping pace with the overall market or its specific sector.

3. Sell if the stock far outpaces the overall market or the rest of its sector.

4. Sell at least some of your shares if a "hot" stock begins to dominate your portfolio.

5. Sell if the long-term trend the company benefits from shifts in a different direction or dies entirely.

6. Sell when the overall economic trend turns downward or the prospects for a given sector go sour.

7. Sell when your stop is triggered.

8. Sell to take advantage of a better opportunity.

9. Sell when everyone else is buying.


http://moneymorning.com/2010/04/06/sell-a-stock/

[winston]

If you are doing some Short-Term trading, what rules do you use to sell ?

Example:-

Opening / Morning
1) If gap on opening, sell on R1 ?
2) Sell on max 3 pips from R1 ?
3) Sell on R2 ?
4) Sell when a high bid volume is taken by a BB ?
5) Sell before Morning Closing ?


Afternoon
1) If Unexpected surge, sell on Resistance ?
2) Sell on max 3 pips from Resistance ?
3) Sell on 2nd Resistance ?
4) Sell when a high bid volume is taken by a BB ?
5) Sell nearer to the Closing ?
6) Sell on One Day Reversal ie. higher high on day but close lower than the previous day's close, on high volume ?

[winston]

How come there's no short term traders in the forum ? All of you are "Buy & Hold" type is it ?

I need your help on how to sell properly during short-term trading.

I have been taking my profits too early,so I need to see what short term selling rules do you use ...

[iam802]

0. Big picture
- I attempts to short as the index is near the kumo resistance on the Daily Chart.
eg. see chart http://stockcharts.com/h-sc/ui?s=$SPX&p ... 1325502298


1. First trade.
If the opening is counter to the major trend, I just wait for the reverse and take the trade.
ie market open up and goes up. I will wait for reversal to short.

2. Second trade.
After which, I will trade the 2nd reversal
- after it start going down, it will reverse at some time (going up).
- I will close my short and go long within the same trade

3. If the above 2 are successful, my third trade is the third reversal which I will hold overnight.
- With the profits from the first 2 trades, I have my buffer for the next day.

[winston]

Thanks 802. So it looks like you will ride it until it hits R1 or S1.

My problem is that I have always take profit before R1 or S1, as it touched my profit objective.

So the better strategy, is to let it hit R1 or S1 frst and then sell quickly, at most 3 pips from R1 or S1.

Just like in golf, u need to putt at least a few inches behind the hole and not aim for a few inches before the hole ...

[winston]

From Dr. Check, The Standard HK:-

Dr Check will think about selling part of any long-term holdings if three criteria are met. 1) First, if the stock soars in a short time.
2) Second, the valuation in terms of the price-earnings ratio rises above the market average.
3) Third, more people start to recommend the stock.

After selling, wait to buy back if it falls more than 20 percent.

[winston]

At my After Action Review, I noticed that I have been selling too early.

For stocks that are trading at reasonable PEs, I need to hold them longer. It does not matter that they have run up a bit or is hitting a resistance.

These could be multi year plays so I have think in multi years. Instead, I have been trading them for small profits and sometimes missed the big move because I'm not in them.

And when they have moved up quite a bit, I tend not to buy them back. Thereafter, they continue their move upwards to be a Two bagger or a Three bagger. Example: SJM

[Poles]

At my After Action Review, I noticed that I have been selling too early.

For stocks that are trading at reasonable PEs, I need to hold them longer. It does not matter that they have run up a bit or is hitting a resistance.

These could be multi year plays so I have think in multi years. Instead, I have been trading them for small profits and sometimes missed the big move because I'm not in them.

And when they have moved up quite a bit, I tend not to buy them back. Thereafter, they continue their move upwards to be a Two bagger or a Three bagger. Example: SJM

Winston,

when do you decide to sell?? on your define target price??

[winston]

Winston, when do you decide to sell?? on your define target price??

Hi Poles,

I have been reflecting on your question for a while.

If I'm Scalping ( Day Trading ) or Swing Trading ( normally one week ), I sell on a very small gain, say 4%.

And I normally Scalp or Swing Trade, when I think that the market has gone up a lot, over a long time, like the current situation. This is your typical "Hit & Run" Strategy.

If I'm Position Trading ( at most a few months ), I will sell when I see fundamentals changing, PEG that is too high or when Market Direction is very weak. I like to Position Trade only after a very huge market drop.

My mistake these past few months have been to Scalp or Swing Trading, when I should instead be Position Trading. However, I was not willing to take the risk, so I end up with "Curry Chicken" meals instead of "Abalone and Shark Fins".


Take care,
Winston

[Poles]

Hi Winston,

thanks for the reply...
I am learning how to sell and when to sell??
For me I will scalp on the same stock that I hold for long term (months)....

20/80 portion. 80% riding on...and 20% scalp weekly....
if I look at the profit equally, seems like the long term ones give me better returns...

20% is mainly from contra...sometimes the loss is due to contra due.

I got hit badly in May...lost 20%, 1/3 of it was this year profit....
I cut & buy back in June....Now it is up 25% ...But if I did not cut...it would be up 35%...

sometime greed make me keep on riding.....always have to remind myslef SELL when everyone wants to buy...

I hope I can make 30% this year....keep my finger cross.