3 Indicators That it is Time to Sell Your Stock

Anybody can buy a stock, but knowing when to sell is the money maker of it all. Exit too quickly, and you left money on the table. Hold too long, and you might actually end up losing money.

How does one know when to sell?

Obviously, depending on your individual strategy and desired profit margin, each answer will be somewhat different. That being said, there are a few guidelines to help you determine when exactly you should be looking to take your profit and run.

1. You stock hits its initial exit target. Basically the most simplest and basic answer. There are 3 targets that should be created before you buy a stock: buy, sell, and stop. Once your target is met, execute the proper action.

2. Your stock is gaining popularity. Just like real estate and any bubble, the more people that enter, the more likely the value of that entity is about to come crashing down. Once you start to feel that more and more buyers are coming than sellers, consider dropping your position. Some people use the level I or level II function of their trading platform; however, just monitoring news and social buzz should be good enough.

3. Wait till the current momentum tops out. Rarely can anybody ever call an exact bottom or top; however, we can usually get close to calling the top or bottom of a mini rally or current momentum. If you are looking to exit your stock, then try to wait until the current mini-momentum is over. This can easily be done by incrementally moving your stop price up until the actual price and stop price meet.

When it comes to selling there is no exact science or simple rule on when to do it. The best thing you can do is trust yourself, and take profit when you can.