Page 1128 - How to Make Money in Stocks Trilogy

114 HOW TO MAKE MONEY IN STOCKS—GETTING STARTED

8 “Secrets” of Successful Selling

1. Everyone makes mistakes! Just be sure to cut all losses short.
Even the best investors get hit with a loss from time to time. But they
don’t dwell on it or wring their hands as the stock drops even lower. They
cut their losses quickly and move on.
So leave your ego and pride at the door, and don’t let a loss get to
you—either mentally or financially. Stay out of trouble by sticking to the
rules in the Selling Checklist.

2. If you don’t sell early, you’ll sell late.
Don’t get greedy. Get disciplined! To lock in solid gains, sell while your
stock is still going up. As Bill O’Neil has said, “Your objective is to make
and take significant gains and not get excited, optimistic, greedy or emo-
tionally carried away as your stock’s advance gets stronger.”
I’ll show you how to do that with our 20%–25% profit-taking rule.
3. Have a selling plan in place before you buy.
If you’re a warm-blooded human being like the rest of us, you’ll find the
real drama kicks in when it comes time to sell. And if you don’t have sell
rules and an exit plan to guide you, it’s easy to freeze and not take action
when you need to.
If your stock is soaring higher, you may get a little greedy and want to
grab every last nickel—not recognizing certain sell signals that tell you it
could be heading for a fall. And if you’re sitting on a loss, you may do the
old “hold and hope” routine, praying it’ll bounce back to break even—
while it continues to put you even deeper in the red.
So make it easy on yourself: Have a clear selling plan in place ahead of
time. Write down your target sell prices for both locking in your profits
and nipping any losses in the bud. How do you do that? Just follow the
Selling Checklist. It gives you a sound game plan for staying protected
and profitable.
4. Don’t let a decent gain turn into a loss.
It’s no secret that stock prices fluctuate from day to day. Even if a stock
is trending generally higher, it will have down days and weeks along the
way. To make money, you need to sit through those swings and give the
stock time to climb higher.