When to sell and cut your losses

[jeffwils]

This week I was up on BBBB, AMTD and EVST. Three days in a row they all slid downward. I sold all of them today to stop my loosing streak. EVST came back up as did BBBB. It seems like whatever I do...the market does the oposite. I saw some nice gains on my stocks but they took a turn for the worse starting on tuesday. When do I sell or decide to hang on hoping they will go back up? When should I cut my losses and look elsewhere? Had I kept the stock I would not have lost as much. This is starting to get old gaining then loosing it all later. Thanks for any help you can offer!

[InvestingMoron]

Get out when you're ahead.

[dustbro]

I learned the hard way that you will NEVER lose if you take a profit. Its when you get greedy that your wallet starts to empty. If your stock starts to dive, you can get out, take the profit, and get back in again when it seems level out so you can take it for another ride up.

[englishman26]

Yep - the trick is to take profits. Decide on a system. Selling when you're down is hard and sometimes necerssary. But if a stock is down, as many are this week, it maybe that the best way to make that money back might be to sell. But the best way might be to hold. Is the stock going to go up again or not? How fast? You have to assess the future of the stock and not dwell on where it's been or what you paid for it. The market doesn't care what you paid for a stock.

CFTN is a buy here at $1 if you want to make some quick money. (I don't have any funds for it but thought I'd throw you a bone!)

[meth]

This week I was up on BBBB, AMTD and EVST. Three days in a row they all slid downward. I sold all of them today to stop my loosing streak. EVST came back up as did BBBB. It seems like whatever I do...the market does the oposite. I saw some nice gains on my stocks but they took a turn for the worse starting on tuesday. When do I sell or decide to hang on hoping they will go back up? When should I cut my losses and look elsewhere? Had I kept the stock I would not have lost as much. This is starting to get old gaining then loosing it all later. Thanks for any help you can offer!

:lol: its funny, i am in the same boat as you. :lol:

when i try to do things on my own, it is hit or miss. when i listen to some of the experienced members on this board, i do better off than on my own. people here are a lot of help, i feel for you though, i am going through some of the same.

good luck to us!

[BuyOnDips]

Here's a good article:

http://www.briefing.com/GeneralInfo/Investor/ToolBox/LearningCenter/edu_When_To_Sell.htm

Some google listing of other articles on when to sell:
http://www.google.com/search?q=reasons+for+selling+stocks

Some of the reasons when I sell:
When a company's fundamentals start to deteriorate.
When there's any hint of financial chicanery.(run to the exits).
When I find a better stock.
When I can't stand the pain. (protect profits or limit losses)
When I get a large % gain in a very short period of time.
When a stock starts to appear highly overvalued

Remember you don't have to sell all your shares at once. If you're not sure what to do, you can always sell a fraction of your shares. Maybe sell 1/3 or 1/2 of them.

[wqcustom]

if we all knew when to buy or sell, we'd all be rich. it's a tough game sometimes. i know how you feel, had a rough week myself. best advice i can give is to have a gameplan as to what you plan to do before you even buy the stock.

if you're trading, then wait for whatever your catalyst is, and get out whether it comes or not. if you're investing, and you've done your homework, and you have longterm horizons, then you can take advantage of dips and buy more, or wait it out, because that was your original goal in the first place before you bought.

as others have said, it's ok to take profits. you may miss another run up, but you may also miss a run down that woulda wiped out your gains. no one knows the exact top or bottom, so remember why you bought the stock in the first place and what your plan was to get out then.

you also need to be flexible sometimes. i think a good cramer example of this REDF. he recently said it was a good long term buy at 16. but the stock ran to 31 so he said you better have taken profits by now. sometimes you may think you're in for long term, but a run like that changes your plan and you need to not be a hog and take profits. take 1/2 off the table, and you're playing with the houses money anyhow.

good luck to ya

[jeffrey human]

I think the key thing in deciding when to sell is to have a system and stick to it, except when you consciously decide to make an exception. My system for growth stocks is to buy at a favorable buy point, using the IBD criteria of a stock that has formed a base. Then I sell if it falls 6%, or I hold if it goes up until it begins to fall toward its 50 day moving average. If I would still be ahead at the 50 day mark, I hold untill it bounces upward at the 50 day point or sell if it falls below. If the 50 day point would result in a loss, I usually sell as soon as the stock has fallen toward the moving average for a few days.

Exceptions: If the stock begins to rise rapidly with declining volume, I sell. If volume is generally low on up days and high on down days I sell.

Special situations: I placed a limit buy order for AMTD at 19.01, so I bought at close to the bottom. My plan was to hold to 26, where it was before the dividend was declared, since their prospects are the same now as before the dividend. Since then there was a downgrade of the stock from one brokerage house, based on their higher than average trding costs. Now I am tracking AMTD in comparison with the S%P 500. If it continues to do as well as that index I will stay with it. If it moves above its 50 day average I will switch to the general system I describe above.

Action of the Market: Right now its choppy and indecisive. If I lose confidence in it I will sell every thing. I use the IBD front page column on the lower right as my guide in assessing the market.

[TheChartGuru]

Jeffwils, are you using charts for trading? I'm concerned with AMTD. It is flirting with the MA(200), very dangerous waters if it falls below it. EVST has resistance at around $17. If it breaks out of $17 , it will go higher. If it pulls back at $17 it may selloff. It's pretty toppy right now and a healthy pullback may be neccessary for it to continue northward. BBBB has resistance at $32 and a gap to fill at $26.50. Becareful, if it has a hard time getting through $32, it may selloff to $26 level.

The Guru has spoken

[jeffwils]

Thank you all for the advice. I plan on picking myself up, dusting off my jeans and getting back in there. Again, thank you for the advice.

[madcowdisease]

Jeffwils, are you using charts for trading? I'm concerned with AMTD. It is flirting with the MA(200), very dangerous waters if it falls below it. EVST has resistance at around $17. If it breaks out of $17 , it will go higher. If it pulls back at $17 it may selloff. It's pretty toppy right now and a healthy pullback may be neccessary for it to continue northward. BBBB has resistance at $32 and a gap to fill at $26.50. Becareful, if it has a hard time getting through $32, it may selloff to $26 level.

The Guru has spoken

Hey Guru, what do your indicators tell you about UNH and MO? I'm holding, and have been for months, MO for the breakup so where it heads in the short term doesn't worry me as much as UNH. UNH has been flirting with my cost basis for weeks now and I dont know if I have much more patience.

Anything you can tell me using your analysis?

Thanks man.