The most important part of investing in the stock market is not how good the stocks you choose are, but how well your timing is when entering and exiting a trade. The stock market is very unstable.
A stock that has been performing well consistently could suddenly go down drastically before you even realize it is happening. Thus, it is important to know when to exit a trade so you can minimize the loss as much as possible. There are three indicators of when it is time to sell your stocks.
First, is when you have achieved your purpose. For example, if your purpose for investing was to save up for your retirement, it is but fitting to sell your stocks once you retire. At this point, you will be liquidating your shares and you can then begin investing in a different financial vehicle such as a savings account where the funds are kept liquid. You may also choose to just invest your savings as time deposit and live off the interests for a certain period of time.
It is also good to liquidate when the industry your stock is within has gone through major negative changes. As these changes will cause the price of your stock to decrease significantly, recovery may take some time or worse, you might not even recover at all. If you are just starting out, it is okay to grab your money since you still have a lot of years ahead of you to save up and more likely, you do not have any major emergencies to need big money for. If you are nearing retirement, meanwhile, it is but logical to cut your losses and liquidate your investments and don’t even think about getting some forex software.
The third indicator that you should sell off your stocks is when a huge spike up takes place in the price of your stocks. An example of this is a rise of 100% or more. At this point, the most sensible thing to do is liquidate your stocks and take your profits.
