Knowing when to buy and sell stock is the fundamental part of stock trading. Ideally, they should be bought as low as possible, and sold at the highest values, but traders can never know for sure how low or high stock will get, and they cannot always accurately predict the course of price movements. However, there are some considerations that can help investors trade for success. Following is some information on the best time to sell stocks.
Buying and Selling Stocks
When entering a trade, any investor should try to get the best price possible. The key is to buy at the lowest value before a stock begins to increase, and then to sell as late as possible before it starts dropping. This can be hard, however, so often, the best thing to actually do is to buy once a stock has dropped low and then risen by an amount that, to the trader, seems to signal a continuing price increase.
After shares are taken on, whether or not they rise up, it is often wise to wait to sell until stock has dropped by an amount that, to the investor, seems to signal that it will continue dropping from there (or seems to indicate a reversal if prices rise high and then dip). So, it is best to buy into stock as early as possible when it seems that it will rise, and sell as early as possible when it seems likely to fall.
Best Time to Sell Stocks
It is best for any trader to sell as soon as possible when the stock seems likely to decrease in value in time to come if it seems unlikely that, after the drop, it will again increase past the price of the sale. For example, if a possessed security is trading at $5 and it has been dropping for a week, if the investor now firmly believes that it will continue its downward course, and it will not, after dropping more in time to come, reach $5 or better in the future, it is best to sell.
The hardest part of deciding when to sell stock is finding the time that, before it drops too low, a stock seems to be showing enough negative momentum that it will continue to drop. Referring to any news reports, available for free at discount trade sites like Robinhood, E-Trade, and TD Ameritrade, and looking at the market as a whole and any other factors that might influence price can help investors decide what might be a simple pullback (a small drop during an overall uptrend), and what can actually signal a turnaround, and a negative price course to follow.
If a stock was trading very high, and any negative news affected it and (seemingly) caused it to drop some, likely it will continue dropping, and then the earliest opportunity to unload shares after a dip in price that signals a downtrend would prove to be the best time to sell stock.
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