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Thursday, February 26, 2009

How to Make Money in Stocks Part 7

WHEN TO BE PATIENT AND HOLD A STOCK

1. After buy new stock, draw a red defensive sell line (CUT LOSS) on graph. If your stock increases 15% or more after a correct purchase, move the defensive sell line up to less than 5% below the pivot purchase price. You do not need to raise up your stop-loss, because you will forced normal correction. Once your stock is 15% above your buy point, you need think when to sell on the way up to nail down short term profit.


2.BUY THE BEST STOCK and wait until you proved it wrong or right. At least 13 weeks after first purchase. But set defensive sell price first.


3. Any stock that rises close to 20% should never be allowed to drop back into the loss column. For example, if you buy a stock at $50 and it shoots up to $60 (+20%) and you don't take the profit when you have it, there is no intelligent reason to ever let it drop all the way back to 50$ or below and create loss.


4.Pay attention to OVERALL MARKET TREND!! If you buy a stock that OVERALL MARKET is downtrend, you will be in trouble!!


5.Major advance require time to complete. Dramatic stock advancing 20% or more in only four or five weeks are the most powerful stocks of all, capable of increase of 100%, 200%, or more!


6.If you have A LEADER STOCK you may to hold it at least until its weekly close below its 10-week moving average price line on increase volume.


7. If possible, try to hold through the stock's first short-term correction once you already have a profit.


8. Holding for a long-term gain during the early stage of a new bull market, in many cases, may force you to stick to your position long enough to make a big gain. Remember, the object is not to be right, but to make big money when you are right.

1 Comments:

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