A profit-taking range of 20–25% is recommended.
It is advised to sell losing stocks first.
Using technical analysis in sell decisions is encouraged.
Opinion
The difficulty in selling stems from human psychology—specifically, loss aversion and the desire to maximize gains. Establishing and adhering to objective sell rules rather than relying on emotional reactions is key to achieving more stable long-term investment results.
Core Sell Point
Decide your sell points objectively, based on predetermined rules and technical indicators, to avoid emotional mistakes.
This article offers eight pieces of advice on determining when to sell stocks—a decision that is often more psychologically challenging than buying. The key is to make objective decisions that minimize losses and secure profits without being swayed by emotions.
Everyone Makes Mistakes. Cut Your Losses: When losses occur, don’t wait for the stock to fall further—exit quickly. Let go of your pride and don’t be attached to your losses.
If You Don't Sell Too Early, You'll Sell Too Late: To secure definite profits, you should sell while the stock is on an upward trend. It is advisable to follow a sell rule when a stock gains 20–25% from the entry point.
Plan Your Exit Before You Buy: Without predefined sell rules and a clear exit strategy, investors may become blinded by greed during a rapid price surge or hesitate to sell when losses occur. Set a target sell price in advance.
Don’t Let Good Profits Turn into Losses: If a stock that has gained 10–15% begins to turn downward, do not let the profit evaporate entirely. Securing even a modest profit of 5–10% is better than risking it all.
Don’t Marry Your Stocks—Just Date Them: Blind loyalty to a stock is dangerous. Lock in your gains when the opportunity arises, and if problems occur, be willing to end the relationship without hesitation.
Sell Your Losers First: It is a mistake to sell profitable stocks while holding on to those that are underperforming. Sell the losing stocks and reinvest in the winners.
When Buying, Look at Both Fundamentals and Charts; When Selling, Focus on Charts: Technical analysis often gives warning signals before fundamental issues become apparent. Use price and volume trends, moving averages, and other technical indicators to decide when to sell.
The Most Important Buy Rule is Buying at the Right Time: If you buy at the wrong time, it becomes much harder to determine the proper exit point. Confirm three key factors—market trend, new growth drivers, and institutional investor support—before purchasing.
