Can You Make Large Profit In Short Time?
Many new investors wonder when is the right time to sell stocks. An old Wall Street saw has it that nobody ever went broke taking a profit. Actually, that saying isn’t 100% correct. You won’t go broke so long as your profits are always bigger than your losses. For that reason, Today Markets has long since encouraged readers to limit their downside risk in every trade. Cut losses in each investment at 7% to 8% or less. No questions asked. Just move on to the next trade. The golden rule of selling is as simple as that.
When a stock is going the right direction, your decision making is not as easy. How long should you hold? Here’s a specific rule to help boost your prospects for long-term stock investing success: Once your stock has broken out, take most of your profits when they reach 20% to 25%. If market conditions are choppy and decent gains are hard to come by, then you could exit the entire position.
But if the market winds are favorable and your stock appears to be still in the early stages of its run, then go ahead and sell at least part of the position, such as a third or half, to lock in gains. Keep watching the stock’s behavior to decide how to handle the remainder.