Quote:
Originally Posted by Jo-boater
From reading through some of the investment posts on here, it seems that many of you guys have a decent handle on how to make a little money in the market. I have never been able to make money consistently with it, but I still try to make it work. The times where it seems like I have made a good buy that goes up and could make me money, I wait to long and it comes back down and does not seem to make it back up. My question is, when do you decide to sell? Do you set a percentage profit as your goal, and when and if it reaches this goal, do you sell all or just some of your shares? If you have a certain amount you expect it to get to and it does not seem to be headed that high, what determines if you want to keep it? I know there are thousands of different scenarios to answer this with, but I just wanted to see what tips you may have so I might can get a little better at this. The only stock I currently have is ABAT.  |
I have said it, and will say it again and again. Learn to use stop limits. When you buy a stock you should immediately know what your maximum pain threshold will be - i.e. what you are willing to lose. And you have to be willing to walk away from the stock. Same goes with your gain - stop limits help you lock in your gain - it's up to you to determine what's enough.
I quit "playing" the market a few years ago, but I day traded heavily for years and I had to learn about limits the hard way. Now I just hold a few high dividend investments and index funds. It's hard to beat the market (over time), and the law of averages says the best bet is to put your money into a market fund. The average 30 year return in the market is roughly 11% and that includes the recent downturn.
This article is old, but well worth the read:
http://www.slate.com/id/2158085/