The Hardest Part of Trading: When to Sell
You only make money when you sell...
To get your money out of a safe, you have to open it. To get your money out of the market, you have to sell.
This market has been on fire over the past few weeks, and many people are left asking themselves a question.
When should I sell?
Reality is that buying is easy, selling is hard.
Everyone wants to know what to buy, when to buy, and how much to buy, but the most difficult aspect of the transaction is deciding when you should sell.
Selling makes us emotional and uncomfortable because it forces you to face the reality that the gains we see are only on paper until we click the sell button. “What if it goes higher? What if I don’t sell here and it goes lower?”
These are common thoughts that go through every market participants head.
I wish it was easy as saying “when x happens that means you sell right away” but it’s just not how this game works. There are a multitude of factors that go into selling, it’s a big decision that can leave us doubting ourselves regardless of the route we decide to take.
If we sell and it goes higher, we’ll feel regret. If we don’t sell and it goes lower, we’ll feel regret.
It’s a game of imperfect decisions and no matter what we do, hindsight will always make us feel like we could’ve done better. The truth is there’s almost no perfect sell. The only thing we can control is making consistent, rational choices that protect our capital and keep us in a position to win long term.
I want to quickly mention that on Tuesday, I published my second shortage + bottleneck article here.
In this one I discussed what I believe to be the next major AI bottleneck, my thesis, the names within the shortage + bottleneck, and I even highlighted which names I already own and which ones I was looking to buy.
All of the names I own are off to a hot start, and I think this narrative is just getting started. This morning, I told subscribers that I bought one of the names on that list, and it has already gone up nearly 10%.
If you recall, back on March 22nd I published an article titled “The Next AI Bottleneck” linked here.
In this article, I went in depth on why I believed the CPU trade was about to take off. I highlighted five CPU stocks I thought were set to benefit, and I’d say they played out pretty well.
INTC: $44 → $80 (+82%)
AMKR: $45 → $78 (+73%)
AMD: $202 → $330 (+63%)
ARM: $143 → $220 (+54%)
QCOM: $130 → $137 (+5%)
Not bad for one month…
In the remainder of this article I’m going to discuss how I decide when to sell, what you should look for, how I like to trim positions, and more. I believe this is one of my most important articles I’ve published, especially after the monster run we’ve had in the market over the past few weeks.