Strategies For Selling Stocks

Strategies For Selling Stocks By Vijay Kumar Sharma
In share exchange, a good strategy is making the impossible, possible! In this trade, some make constant profits and others suffer losses on account of the application of correct or incorrect strategies respectively. The trading value of the share does not remain the same due to many factors that impact it. Share trading can not be categorized as the rocket science. Thousand of investors think about a particular share and all of them think simultaneously but differently.

Their combined thinking decides the mood of the market, as for a particular share. Apart from making the detailed research and analysis of the share that you propose to take into the fold of your portfolio, you need to evolve a strategy which is exclusively yours; that suits your working style; that revolves round then perimeters of investment that you have decided for yourself.

Selling the share that has good run is not the easiest of the decision to make. But from the point of view of the strategy that you have worked out, you may have to take such a decision.
You expect positive results from each share that you have included in your portfolio. You are making periodical reviews as for the performance of each share. Suddenly, you find the warning signal for a particular share. You find the regular slump over a period. This is the crucial period for you to decide to part the company with the share. Study carefully whether the fundamentals of the company have failed. Scrutinize three important areas-sales, debt and cash flow. If you see the stress here, something tangible needs to be done at your end. These negativities are too severe to be ignored. Keep aside your emotions and take a realistic view of the prospectus of the share. Do not expect that something dramatic will happen and the share price will shoot up. Examine the various details like an impartial judge, and take the decision to sell the share without further delay.

It is better to follow the set procedures. Set a stop loss limit for each share and also their upper limit that will trigger the automatic sale. Do not go on revising the upper limit, unless you have very strong reasons for doing the same.

One of the positive indicators for the health of a company is its ability to pay regular and reasonable dividends. Slashing in the rate of dividends or its elimination altogether even for one year must put you on enquiry immediately. The company report may say it in so many beautiful words to reassure the investors, but that is part of their public relations exercise. Dividend cuts are serious events in the history of the company, that the company has developed some intrinsic trouble. For every CEO dividend-cut is the most painful decision to make, because he knows that it will hurt each and every investor who has reposed trust on the administration of the company.
Remain thoughtful and watchful- what is happening in the market! Many investors are up to tricks that will fascinate the new investors, and if one accepts their guile, as part of the selling strategy, it is extending invitation to trouble. Ignore the rumors and do not rush. The hype will ebb, and the market will collapse and you will regret your actions. Never lose track of the fundamentals, when you make the decision to sell a share.

When a growth share stops growing, make it a point to review. When the growth of a share, is lesser than the average market standards, think of the next share.
Trade moderately, within the limitations of your strategy and the level of your investment. For every trade that you do, you are paying commission. Your broker may not encourage you to make more trades, but he can not stop you from doing trades. After all, his duty is to carry out your instructions. Avoid excessive trading.

In share trade, buying and selling are alternative beats of the same heart. Just as you have the buying plan for shares, have a selling plan as well. After all, you earn profits by selling as well as by buying!