Stock Trading Rules
When to sell is just as important as when to buy, but few discuss this!
Alan Elliott of Investor’s Business Daily says to sell a
stock once it drops 7% to 8% below your purchase price. Tom Lydon from ETF
Trends suggests you should also monitor the 200-day moving average of your
securities. If an investment falls below it, it’s sold.
A stock moving up in price on higher than normal volume
indicates strong buying conviction that could carry the stock even higher. A
stock headed lower on big volume increases could signal strong selling pressure
and an emerging downward trend.
I have a better strategy that involves no emotion and can be done with a spreadsheet and limit orders. It works on both the buy side and the sell side. Am I going to give it to you? Yep, just order Computerized Tools for Profitable Investing and stop wasting money on systems that don’t work.
