stock trading strategy -- when to sell your hot stock

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 downj

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