Saturday, April 19, 2014

When should you sell your stocks?

The decision of selling stocks is influenced mainly by the desired to make profit by selling at higher price than the purchase price. The greed is what makes the market good. Some get what they want: more profits, some don't get what they want. As it's said that the greed is good and now it seems legal. Selling with greed is normal now and it's legal. No-one is going to tell you that you have broken the rules by at higher price. Normally what people do is simple. One person sells at the price that seem to be high enough to sell and at the same time another buys it thinking that it will grow further more. This is fundamental rule of selling stock. There is buyer and seller simultaneously because only one seller and only one buyer cannot exist.

Now we have both buyer and seller, when should a seller sell? This question also provide answer to the next question: when should a buyer buy stocks?
There are so many rules that people make while selling and buying stocks. This article is about selling stocks of companies and it covers the fundamentals of selling. Here are three simple yet powerful steps that can bring bring you fortune.

Analyze the stock's price:
See the trend, learn from people you know in the related field, search and search for information about the institution you hold and most important of all be updated to the possible next move. If there is positive activities happening in near future then hold else sell. Remember the trend is important, understanding how thing are going on is important because most probably the next thing that will happen in near future might be similar to the present.

Do not give an emotional judgement on selling:
Trust the logical part of decision making process, make it rational. If some one going to tell you that you are most probably going to face loss in the stocks you hold then do not just blindly believe in their words only. Judge, evaluate, understand what is actually going on in the market, make rules to trade stocks safely, rationalize your thoughts and most important of all remember that it's a game, if one wins then other loses. The decision is all yours, whether to be a winner or a looser.

Knowing the limits of your stocks:
Some people might suggest that selling stocks is best when it's highly overvalued, others might suggest to sell when there are buyers available at certain price and some even try to play safe with limited profit margin. The most important of all is the knowing the limits and current price of stocks. The historical data is never useless. They provide possible price of the stocks and knowing the highest and the lowest is better inorder to know the present position and take necessary steps accordingly.

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