When is it Time to Sell?
After using the E.T.P.C. tool to determine a Buy price for a stock, "When is it time to Sell the stock for a Profit?" Do you sell when the price reaches a specific target price? Do you sell when a candle or other pattern says it has finished?
Having different thoughts regarding, "When to Sell?", many times I sold too early and the price continued to rise (lost profits). Or, I did not sell (thinking the pattern is still in an uptrend), and ten minutes later, what would have been a $500 profit turned into a $500 loss. The problem of turning into a loss is, " I missed a profit opportunity!"
Woulda, Coulda, Shoulda....I'm sure most people had the same feeling at some time. I wouldn't call it stupidity. I wouldn't call it greed (as I was following the charts or patterns religiously). I just call it "D'oh"! my bad .... The "Homer Chicken!"
Remember, fellow chickens, I have been trading using Real money in a Real 401k account to "Practice with and Test" my theories with a few nervous times and a few close calls. I also trade in a smaller TDAmeritrade account and will provide information and expand on the smaller trading account for those without a 401k.
I hope my website helps you to avoid some of the mistakes I have made so keep on reading. However, remember that the name of the game .... the #1 Goal is to - Make Money!
So, "When is it time to sell?"
You are Committed to Selling a stock As soon as You Buy a stock. You spent time determining what price to buy the stock at and how many shares to buy. Your GOAL is to make money! i.e. My current Goal is to make $1,000 per month . So, every month, four $250 profit trades is reasonable, attainable and achievable for reaching My Goals. What are Your Goals?
Because Making Money is the #1 Goal, "Why not just concentrate on making $ after a Buy?" I focus on a dollar range I would like to make for each transaction (usually $100-$1,000). When the price hovers around $200-$500 I start scratching in the chicken pen ready to pull the trigger.
Candle patterns have already proven themselves to repeat over and over again. The hard part is the Buy - determining what price to pay and how many shares to buy?
I sell ALL SHARES AT THE SAME TIME. Some traders only sell incrementally ( a big word for a chicken).
My main reason is to keep all the profits I can make at any one point in time. Then, move on to finding the next trade. Holding for the long term (in my chicken sense) is Old School. Who says the company's stock you bought today will be here in 10 years, or 5, or even tomorrow?
Have a Goal. Work at reaching your goal. Remember that you will not reach your goal if you do not take profits! Reaching my Target Goal of +25% in one year is what I scratch for.
Good Trading to All!
Remember to Have Fun!