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Why would the exit be the most important part of my trade?Never, ever buy a stock without having a good exit plan. You have to know when to sell in order to minimize your losses and protect your profit. A good trader can make money with mediocre stock trading strategies by managing their money correctly and cutting their losses and maximizing their gains.How DO I Cut My losses? One of the most important rules of trading is, Protect Your Money. When I trade a breakout from resistance, I like to put a sell stop order just below the breakout line. If the price breaks back down through that line, get out and find another trade. Not all trades are going to be successful. When Should I Sell To Protect My Profits? There are a lot of ways to determine the right time to sell. You can use indicators, moving averages, trailing stops, trend lines, resistance areas, and many others. But I like to keep it simple. Trailing stops may be the easiest. You can set the percentage of retracement at which you would like to sell. Then forget about it and let the stock run until it sells. If you prefer to keep a closer eye on your stocks, then a trend line break may be the way you would like to go. Using a trend line break might let you stay in longer and enjoy a longer run. Stock Trading Tip Knowing when to sell is as important as knowing how to pick stocks, in any stock market trading strategy. And continue your stock trading education here at "Stock Trading School."
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