www.investing-performance.com Stock Trading Strategy – When to Sell Your Hot Stock

Disclaimer Stock speculation is very risky Make sure your investments are suitable for you Do not trade with more than you can afford to lose. Seek professional investment advice. This is not investment advice. No warranties, you are on your own.

A Very Important Subject How to spot when the stock has peaked

Speculative Stocks I go for the maximum return The type of speculative stocks I trade have different rules They are volatile and risky

I start cheap Most people buy stocks because they are going up I buy them cheap I don't depend on a bigger fool to take me out

People get carried away Speculative stocks go up fast and peak fast You have to be nimble and alert These stocks are challenging

Short Sellers Short sellers and market makers are always looking for overpriced stocks When these stocks show up on their screens, they go short and knock them down j

When to Sell? We guess! It is easy to know when a stock is cheap Nobody knows how far the excitement in an up move can go

Overpriced Stocks You can use formulas to tell when a stock is overpriced, but overpriced stocks can still go up

Market Capitalization Is total market value of the company reasonable in terms of sales and earnings?

A $100 million market cap for a company with $1 million in revenues is way too much Look for an excuse to sell

How Fast Up? If the stock is up ten times or more in one year, you are looking for an excuse to sell

An Uptrend is Broken Don't ask why – the market is telling you to sell first and find out why later

Three times uptrend If the uptrend goes into a higher uptrend and then another, sell the spike

Dropping off a plateau If the stock goes sideways after going up, and then tips down, get out

The Big Rule Sell Too Soon

Look for any excuse to sell a stock that is way up

No Regrets Do not worry if you sold too soon – there are more profits waiting for you

Study Up You need more than this basic summary if you are going to survive swimming with the Wall Street Sharks

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My books on Amazon How to Find a Home Run Stock How to Pick Hot Reverse Merger Penny Stocks How the Short Raid Your Stock, Destroy Your Company and What to Do About it

John Lux Trader, investment banker, quantitative analyst, former OTC market maker Lux.Investor@ gmail.com Copyright ©John Lux 2011