Guide to Buying / Selling Stock
When to sell a stock is very difficult to know exactly when to sell. There has not been a lot of research on the subject, and when asking advice from a broker you usually get an answer like, “ Let’s watch for a few more days”, or “ It’s not doing well right now but let’s watch it a little bit more.” You never can get a straight answer. There are a few things to keep in mind; you must watch your stock. It is your money and no one is going to look after it better than you do. If the stock you have bought has gone up, there are two ways you can go, sell and take the profit or let it ride.
When it comes to determining how well an individual stock is going to be, look at the trend of the stock. The most important thing to look for is failure. A stock that has tried several times to make come back after a high sell, but sells lower each time is considered a failure. The stock must sell below the price level that it sold for the previous failure. This defines the stock’s trend as down not up.
When you have a failure, do not let the stock sit too long. Sell and sell fast, do not put it aside in hopes that it will come back up if you hold on to it long enough. This is a warning sign that you must heed to if you hope to recuperate any of your investment. The game of stocks entitles you to where you do not have to be concerned about what and why the stock is not doing well. When you have made that decision to sell you have made an objective decision, now stick to it and sell.
The best time to decide to sell is when the stock market has closed for the day, this way you will not let every up and down affect your decision emotionally. When you make the decision to sell use what is called a protective stop order. To issue a protective stop order all you have to do is notify your broker, tell him that when the stock drops below a certain point to automatically sell the stock.
Stock orders can and are used every day very effectively. You can use the system of stock orders when stock rises also. A stock order may be issued each time the price advances, all you have to do is cancel the old stop order and enter a new one. It is best to keep in contact with your broker if you decide to use stock orders. There is an important rule or stock secret to remember, when you decide to issue stop order either to sell or to buy, remember to set the stop order ten percent either below or above the current stock market price.
When the decision to sell is made keep in touch with your broker to make sure all transactions are handled professionally.
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