When To Sell Stocks To Take Profits

Categorized | Learn How To Invest

Tags | buying stocks, chart, gains, good risk reward, IBD, market, position management, professional investor, self investor, sell stop, stock, taking profits, technical analysis, trading

Posted on 30 October 2007 by Jmartin

Another ingredient to a successful investment plan is knowing when to take a profit. I will admit this is one of the hardest parts of the game. If you’re a successful trader you will experience a few large gains every year that will count for the majority of your total gain for the year. If you let fear control you then you may sell too early. On the other hand if you become greedy you may hold on too long and allow your profits to slip away. Below you will see an excerpt from the IBD on how to take profits. I encourage you to use this example when you create your own investment plan.

> A simple, clear-cut strategy is to sell after your stock has gained 25%, unless the stock has gone up 20% in just one to three weeks.

> Stock charts are especially helpful in spotting signs of weakness in stocks, often providing clues much earlier than any fundamental indicators show.

> Look for climax runs, exhaustion gaps, failed breakouts, significant violations of the 50-day moving average and other characteristics of a weakening stock.

> Remember to check the overall market. If the market comes under distribution and weakens, your stocks will have a hard time making any further advances.

For professional investment advice on this topic contact:
Allgen Financial Services, Inc.
888.6ALLGEN (888) 625-5436
advisors@allgenfinancial.com
www.allgenfinancial.com

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