Quick Guide When to Buy and Sell Stock
Emphasis more on profit growth of a stock rather than Pay-to-Earn ratio (PE). People prefer to buy high profit growth stock with PE as high as 30 rather than a low profit growth or negative profit growth stock with PE as low as 5.
Be Leader in Same Field
Always buy stocks that are leaders in the same field.
Always buy stocks while the price trend is going up. Never buy stock while the price is going down – this is the time you should prepare selling not buying.
Buy More Stock
Always buy more stock only when the price has been risen from your previous purchased price. Never buy more stock when the price has been fallen below your previous purchased price despite it may seem cheaper.
Best Buy Time
Prefer to buy stock that the price is going up although the price may seem higher. Never buy stock that the price is dropping down and seems to be much lower than before.
When to Sell Stock to Prevent Loss
Always sell your stocks promptly with decisive mind when suffer a small loss (for example, 5% or 7%). Never wait and wait and hope that this is a good stock that will recover the price sooner or later.
When to Sell Stock to Take Profit
When to sell stock is much harder than when to buy. Selling portion by portion while the price is going up seems to be a good way to guarantee profit. Always watch when the selling power overtake buying power. Always obey the Supply and Demand law. For the uptrend market, there must come to a point when the buying power become weaker and weaker and the selling power become stronger and stronger. Only the ignorance or people without the knowledge of Supply and Demand will believe that the market will go up indefinitely.