Selling Strategies - When To Exit a Trading Position

(PRWEB) January 16, 2006 -- Buying stocks is easy. Knowing when to sell is the most difficult challenge facing investors. Without an selling strategy, many investors let their emotions make the decision of when to sell. This often leads to selling at the wrong time.

It's important to understand the psychology of investing. When traders make money, there is instant euphoria. When traders start to lose money, there is a sudden "deer caught in the headlights" type of emotion, which makes all traders unable to do the right thing. They fear that the moment the sell order is placed, will be the moment that it starts to rebound. Not only do they fear that we will be that guy who sold at the low of the day, but that we will miss out on untold fortunes because we got out too early.

While this happens, more often than not, a small loss turns into a much bigger loss. Remember, a 40% loss started off as a 5% loss.

Having a stop loss exit strategy is the most effective way of limiting downside risk and taking your profits.

So what is the best stop loss strategy? Our web site features not only great trading strategies, but also 2 effective exit selling strategies. One simple, one a little more complicated, but possibly more effective and will preserve your capital.