To be honest, buying and selling of stocks is the crust for any dealing in the stock market. Very often, you might hear that “I should not have sold this stock, this stock is soaring high” or “I should have sold this share much before”. These instances are quite normal and consistent. Don’t you want to know its reason, its simple- timing? Selling stock is all about timing and calculations.
Most of the dealings are based on sheer combinations of calculations and timing in accordance to the future market. Any selling stock, which matches the timing and calculations, can create a big deal for the trader. A well-calculated hit can prove to be a boom for the trader. It should be noted that there are many rules to be followed by any trader while buying and selling of stocks.
Large part of trading depends on the bulls and bears of the market. When a boom in the market, traders are keen to buy them as they are sold at high prices and vice versa. Greed in shares takes nowhere. Penny and more pennies makes a millionaire, hence, a trader must keep in mind to grab the small profits and not leaving them in wait for large chunks.
Most of the traders buy stocks and sell them at high prices. It is obvious that they prefer holding them until the top, but is advisable to sell them at the right time as holding booming stocks may cost you heavy. A sudden fall in prices may mead to unbearable loss. Also, the opportunity investments are also lost while holding a particular share. Hence, the shareholders must keep in mind the opportunity cost and grab what they get.
Also, while a share is at its downfall, there is no intelligence, holding it for long. It takes to nowhere except heavy losses. The expectations to rise in future are useless and merciless when they evacuate all profits and even the original cost hence, it is important to set a limit for any stock, which is purchased.
Some of the features that must be devised in selling stock are the automated plans and stop order limits. These plans are totally practical and automated especially made to overcome human weaknesses being miss-calculative and extra hopeful. They include setting a limit for the stock to be sold.
As soon as the price tends to be lower than the set limit, the shares are automatically sold saving the trader from heavy loss. Also, these help keeping a check over the risk taking capability of the trader, contributing profits time to time. The limit can be set either way, upper or lower for sale and purchase.
Though the limit setting is a sheer idea for selling stocks nothing can match the human calculations and research work. Apt research and sheer analysis give the idea of the share move according to which the plans for the shareholder may move. This not only helps him gain better experience but also adds to the perspective of the day trader.