Post by Emperor AAdmin on Feb 12, 2008 11:29:49 GMT -5
from various sites
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www.formeraboutguides.com/investingcanada/library/weekly/2000b/aa110900.htm
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This is just a list, more info in the link
www.michaelsincere.com/10_Smart_Selling_Strategies.html
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www.incademy.com/courses/When-to-sell/When-should-you-sell/14/1065/10002
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www.incademy.com/courses/When-to-sell/When-should-you-sell/14/1065/10002
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In his best-selling How to Make Money in Stocks, William O'Neil lists 36 selling guidelines, several of which relate to blow-off tops. They are:
* If a stock has a larger increase on a particular up day than on any previous up days, a top may be near.
* The heaviest volume day often coincides with a top.
* If a stock has a rapid price run-up for two or three weeks, it may be a blow-off top.
* If a stock runs up quickly for a week or two after a stock split, it may be a top.
* Stocks closing at the low end of a day's trading range during a run-up indicate a possible top.
www.formeraboutguides.com/investingcanada/library/weekly/2000b/aa110900.htm
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This is just a list, more info in the link
10 Smart Selling Strategies
By Michael Sincere
(This article excerpt first appeared in the May, 2006 newsletter for Fidelity Investments.)
1. Have a selling plan
According to professional traders, your trading plan must include a minimum of three numbers:
• Purchase price
• Expected selling price (written as a dollar amount or by percentage)
• Emergency exit price (written as a dollar amount or by percentage) if the stock goes against you
2. Use flexible price targets
3. Use flexible time targets
4. Cut your losses and protect your gains
5. You can't go wrong taking profits
6. Using the "c**kroach" theory
When applied to selling, the c**kroach theory means that if you see anything wrong about a stock you own, either a negative news article or other information, you sell.
7. If in doubt, get out
8. Know your psychological sell signals
When you trade stocks, you not only battle the market but your own emotions. As many traders know, the two most common emotions are greed and fear. Greed prevents you from selling at the top. And fear causes you to sell after the damage has already been done. It is your responsibility as a trader to identify these emotions and strive to keep them under control.
9. Scale out of your position
10. Sell using technical indicators
Final Thoughts
It's not enough to know how to sell — you also need the discipline to know when.
www.michaelsincere.com/10_Smart_Selling_Strategies.html
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Global-Investor.com > Incademy.com > When to sell
14. William O'Neil's trading system
Whenever a stock is bought, a tight stoploss of 7-8% is set below the purchase price.
Taking trading profits
In general, stocks should be sold
* if they do not show a profit of more than 20% within 13 weeks
* as soon as they have risen by 20%
O'Neil's rationale here is that the prices of most growth stocks tend to move 20-25% before consolidating at higher levels.
Stocks that do not rise by this amount within three months are probably faulty selections. Unless there are only temporary reasons for their sluggishness, they should be sold so that the cash can be profitably reinvested.
If, however, a stock rises 20% in less than 8 weeks, it should be held for 8 weeks and then analysed again to see whether it should be held for a long-term gain.
The aim here is to hold on to stocks that have particularly strong momentum, with the potential to make gains of several hundred per cent. For these longer-term holds, O'Neil specifies 36 different sell signals. Among the most important are:
* "Sell if a stock advance gets so active that it has a rapid price runup for two or three weeks (eight to twelve days). This is called climax (blow-off) top activity."
* "Consider selling if a stock runs up and then good news or major publicity is released."
* "You may occasionally want to sell if a decline from the peak price exceeds 12% or 15%."
* "When it's exciting and obvious to everyone that a stock is going higher, sell, because it's too late!"
These rules illustrate a key principle behind O'Neil's system and those of many other traders. Namely, to follow the trend until sentiment towards a particular stock becomes too optimistic. Then you have to be an early seller: "The object is to get out while a stock is up, before it has a chance to break."
Other systems
A more sophisticated and highly technical system can be found in One-Way Formula for Trading in Stocks and Commodities by William Dunnigan.
www.incademy.com/courses/When-to-sell/When-should-you-sell/14/1065/10002
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Global-Investor.com > Incademy.com > When to sell
When to sell
15. The most important rule of all
In Beyond the Zulu Principle, Jim Slater says,
"The oldest and best axiom in investment is to run profits and cut losses - that way profits are likely to be large and losses are bound to be small."
Never has there been a rule more honoured more in the breach than the observance. Sadly, every study on this subject shows that private investors tend to sell what they should have kept, and keep what they should have sold. This is what Peter Lynch memorably describes as pulling up the flowers while watering the weeds.
It is easy to demonstrate arithmetically why this is a bad policy. Suppose you have a portfolio of 10 shares and your annual profit target is 15%. Then say one share drops by 20%. Suddenly, your other 9 shares have to make, not 15% on average, but 19% for you to make your target. The further your single loser falls, the worse it gets.
Example
This table shows how fast the required average rises as that one loss increases, for two sample portfolios with targets of 15% and 20%:
Example
This table shows how fast the required average rises as that one loss increases, for two sample portfolios with targets of 15% and 20%:
..............Winners have to make (%)
Loser............................For 15%...........................For 20%
falls (%)........................average...........................average
10.................................17.8.................................23.2
20.................................18.9.................................24.4
30.................................20.0.................................25.6
40.................................21.1.................................26.7
50.................................22.2.................................27.8
By the time one of your 10 shares has halved, the other 9 have to average 22% apiece just to make a modest 15% target. They have to do half as much work again as you were asking from them originally. If your target is 20%, any single loss above 30% means you need your winners to beat Warren Buffett's 40-year average of 25.6%.
You are no longer on Mission Achievable, you are on Mission Impossible.
www.incademy.com/courses/When-to-sell/When-should-you-sell/14/1065/10002
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