Buying the right stocks only completes half or less of the investment process, and the next step is to track individual stocks and sell them after a significant increase in stock prices, so how to sell stocks is equally crucial.

Buying the right stocks only completes half or less of the investment process, and the next step is to track individual stocks and sell them after a significant increase in stock prices, so how to sell stocks is equally crucial. Buying stocks is for making money, but it can also lead to losses for investors. To avoid significant financial losses, individual investors need to learn how to sell stocks. Here, we introduce a simple and practical method for selling stocks. Learning and using this method involves three steps: first, learning some useful selling rules; Secondly, follow these rules in all your marketing activities; Thirdly, never violate these rules. Big bull market! How to maximize profits in a volatile and adjusted stock market! Through research on the stock market, the following five rules for selling stocks have been summarized, hoping to provide some help to everyone.

Selling rule 1: Resolutely stop loss 7-8% below the buying price

The first and most important selling rule is difficult for many investors. After all, for many people, admitting that they have made mistakes is quite difficult. The most important thing in investing is to quickly recognize your mistakes and minimize losses when you make them, which is the reason for the 7% stop loss rule. Through research, it has been found that 40% of large cap stocks tend to return to their initial explosive point after a breakout. The same study also found that stocks that have fallen 7-8% at key points have a lower chance of performing well in the future. Investors should be careful not to only see a few examples of stocks rising sharply after a major drop. In the long run, investing continuously to minimize losses will yield better returns. Therefore, the bottom line is to sell the stock when the stock price drops below 7-8% of the buying price! Don't worry about bearing small losses when you make mistakes, you will receive more compensation when you haven't made any mistakes. Of course, there is one thing to note when using stop loss rules: the buying point should be the key point, and investors should judge the buying point as the breakout point when buying the stock, although the buying point may not necessarily be the breakout point in hindsight.

Selling Rule 2: Sell Stocks After High Tide

There are many ways to determine whether a bull stock will peak and fall back to a reasonable price, and one of the most commonly used methods is when the market kills all investors trying to own the stock. After gradually climbing 100% or even more, a stock suddenly accelerates its rise, with a price increase of 25-50% within 1-2 weeks, almost vertically rising from the graph. Isn't this situation very exciting? However, while shareholders are happy, they should also realize that it's time to sell their stocks. This stock has entered the so-called peak zone. It is difficult for the general stock price to continue rising because no one is willing to buy at a higher price. Suddenly, the huge demand for the stock turned into a huge selling pressure. According to research on bull stocks over the past 10 years, it is difficult for stock prices to return to their original state after experiencing a peak decline, and it would take 3-5 years to do so.

Selling Rule 3: The opportunity to sell is to continuously reduce volume and reach a high point

The stock price is determined by the supply and demand relationship. When a stock price starts to rise sharply, its trading volume often increases significantly. The reason is that institutional investors are rushing to buy the stock to stay ahead of their competitors. After a prolonged period of upward movement, the driving force behind the stock price decline. The stock price will continue to hit new highs, but trading volume will begin to decline. At this point, one must be careful as few institutional investors are willing to buy the stock again. Supply begins to exceed demand, and eventually the selling pressure increases. A series of shrinking volume increases often indicate a reversal.

Selling rule 4: Sell after making a profit of 20%

Not all stocks will continue to rise, and many growth investors often sell their stocks after the stock price has risen by 20%. If you can sell stocks at a profit of 20% and stop at 7%, then you won't suffer losses by investing 4 times against 1 time. O'Neil provided an exception to this rule, stating that if the stock price rises by 20% within 1-3 weeks after the breakout point, do not sell and hold for at least 8 weeks. He believes that such a rapidly rising stock has the potential to increase its stock price by 100-200%, so it needs to be held for a longer period of time to share more profits.

Selling Rule 5: Sell a stock when it fails to break through the latest platform

Everyone knows that the four seasons of spring, summer, autumn, and winter change, and the trend of big bull stocks also has a similar cycle. These stocks are experiencing a rapid rise and alternating changes in building platforms. Generally speaking, the longer the platform is built, the greater the increase in stock price. But there is also a possibility of the stock price peaking, and the stock price may plummet significantly. Usually, profits and sales growth are very good when stock prices peak, as stock prices reflect the future. Undoubtedly, the stock price will peak before the company's growth slows down rapidly. When there is significant unfavorable news that is expected to lead to the failure of the latest platform construction, investors should quickly sell their stocks.