Price targets and selling

[Gfclappah]

Hi all,

Just wanted to know what your selling structure is:

When I buy a stock I have a rough price target but I find it difficult not being tempted to sell when I’ve made 30-40%.

I am thinking of setting a price target and then using ATR to determine a stop to obtain potential further gains. If the price keeps rising I will ride and continue to rise my stops until eventually it cashes out. If it drops and doesn’t rise from the initial target then I will still have cashed out close too it.

What do you think, what do you do?

[phildawson]

Its super tough learning not to be greedy. I also have points where I’m up like 30-40% and I’m wanting higher for no logical sense. You have to try and take emotions out of it and look at the charts to have an exit plan.

On long term a let it go further, but short/med term I’m locking in after 10% or 20% if it has a clear run.

Sometimes I keep some running however that doesn’t always go to plan. Recent MARK I got in 1.5 sold most near 1.85 at 20% profit but got greedy believing this earnings will be different. I even made a chart to try and tell myself get out now.

Nope sell the news and its dropped. So now need a 17% increase to break even on the remaining shares. Doh.

Anyway don’t think it’s at x% and I need X more for a nice round number.

The key thing to look at is the SMAs (I run 7,30,50,100,200) where is the price in comparison, have a look at the MACD is it turning bearish and getting closer together, is the RSI above 80 that’s it’s over bought. Also look is the buying volume is it reducing. On intraday how far is it from vwap too.

Good idea to look at the 5min, 15mins to check these signals but also importantly the 1hr, 4hr and daily.

And of course DD why is it going up! Is there an actual reason or is it being pumped.

I don’t have L2 access but I ask on Stocktwits and they generally post at points where the price is hitting a resistance, and it’s useful to see what seller wall has formed (even if it could be bluffing). If you have say 100k ask at 1.9, 1.91, 1.92 etc then dont expect the price to get to 2 without some serious buyers.

So going back yes once it’s reached a price you would be happy to take profit, go ahead and set a SL, set alerts notifications and get the

[nickspacemonkey]

My philosophy is to never sell. But I’m not a trader. The only time you should sell is if something about the business has fundamentally changed to where you no longer wish to own the company. Picking an arbitrary price point to sell in my opinion is silly.

I also believe that TA is nonsense, no offense phil.

[Gfclappah]

I wouldn’t say TA is nonsense, I just don’t think you should rely on it. Support and resistance exist and price history is useful in determining a price target. Combining this with fundamentals I think is useful…

[nickspacemonkey]

True support and resistance levels exist and indicators do display information about the historic movements, but this in no way helps you guess what it will do. It is pretty random if it will break a resistance level or hold at a support. You are simply guessing which way it’s going to go in my opinion. I can make arguments for it to go up or down in the short term from the same information, I admit that I really have no clue. But that’s just me.

[phildawson]

@nickspacemonkey

Picking an arbitrary price point to sell in my opinion is silly.

Yeah don’t pick just arbitrary points.

Make clear decisions as to why you are going to buy or sell. The charts are useful in providing signals, traders aren’t going about now should do. These days a lot of big action is based on algorithms there’s no human involved.

Investing is slightly different, where you’re aiming for that 10-20% over the year(s) and not concerned to sell unless the business is turning sour.

[chantal]

I only use EMA 50 and EMA 200 to see direction of the trend. Besides that using CCI indicator to spot for divergence. A divergence could mean a change of direction and thus exit position.

Example below. There was a divergence, but kept position open. You could close it and get back in when it shows divergence on the bottom.