| Well-researched calculations and commonsense | | | | maker moves. Such moves are generally manipulated |
| approach make a reasonably perfect sell of a share. | | | | by vested interests that do not play a fair game in |
| Buy low and sell high is the golden rule of the | | | | the share market and indulge in skilful manipulative |
| exchange. But how to apply it practically is the moot | | | | activities. |
| question. Many follow the model called Common | | | | In a bad market your decisions to sell must be fast |
| Sense system. As per this system, you buy shares | | | | and you should follow the cut loss limits without any |
| at the level of 10 percent declines, and sell at 25% | | | | emotional involvement. Sell the stocks that plunge |
| increases. With NASDAQ Composite as the base, it | | | | below 7-10% of the purchase price. No use persisting, |
| has been observed that since 1979, average rallies | | | | and hoping for the impossible recovery scenes. It |
| have been 50% and the declines 20%. This system | | | | does not take much time for the 10% loss to move |
| has stood up to the discipline of selling into rallies and | | | | to 20% loss. What is the basis for your stand that |
| buying into declines. | | | | the market will recover except your stubbornness? |
| A prudent investor will not follow any system to sell | | | | When you feel that something is wrong with the |
| shares, slavishly. Dynamic approaches, market timings, | | | | stock, do not give it the benefit of doubt of |
| calculated risks, are all part of the trade to sell. Some | | | | recovery. Sell it anyway, and when the position gets |
| of the important points that will help one to take the | | | | clearer, you can take a different position for the |
| decision to sell a share are: | | | | same share. There are many options for you; the |
| Do not give up the conventional wisdom, when you | | | | exchanges are flooded with thousands of good |
| see the sudden spurt in the market. Money is earned | | | | shares. |
| in the market by swimming against the tide. The | | | | After the persistent uptrend the share begins to |
| conditions in the market may be bad due to several | | | | move sideways. This process is known as churning |
| reasons. Economic perspective can be the important | | | | and this state of the share should immediately put |
| one, that will have long-term impact on the market | | | | you on enquiry. The run is probably coming to an end. |
| and selling decisions under such conditions will require | | | | This is the time for you to book profits, and watch |
| detailed study. How much time the market may take | | | | from the fence. You have opportunities to get in |
| to recover? Whether you should still hold on to the | | | | when you feel the time is right. |
| shares in your portfolio or decide to call it a day and | | | | Sell from the position of strength. Do not wait for |
| sell them, if you feel the position will work to your | | | | the stock to peak. No one has ever reached the |
| disadvantage in the long run. | | | | so-called perfect peak and the rare one who has |
| Sell rules that normally fructify and take one to the | | | | achieved that is extremely lucky. It is sufficient for |
| area of profits are: If the share goes down | | | | you if you are moderately lucky and get out of the |
| substantially, never hesitate to sell it as fast as | | | | position by booking profits. Take profits when it is |
| possible. Strictly abide by the cut loss limit | | | | necessary, because emotional entanglement is the |
| pre-decided by you at the time of admitting the | | | | greatest stumbling block at this stage. |
| share to the portfolio. Be not afraid of the small | | | | The selling individual is not a weak trader. The buying |
| losses, and if you do not act, hoping that the market | | | | individual can not be considered as the strong |
| will recover, bigger losses are certain to engulf you. | | | | investor. Both are doing their jobs with the |
| This has happened in the past with so many | | | | perspective known to them. |
| investors. Your first duty is to protect your capital. | | | | Only they must do the right thing at the right time! |
| At the same time be wary of the false market | | | | |