Know When You are Going to Sell a Stock Before You Buy It

You have completed your analysis.  The trends are in place.  The vibes are right. The stock has winner written all over it. So, very excitedly – you enter the trade. Since stocks go up over the long term, your job is complete.  Now, just sit back and watch your money grow. 

Many retirements were short-circuited in 2000 employing this strategy.  Six years later the NASDAQ still needs to double to return to its highs from 2000.  That’s right it needs to increase 100% to break-even and that doesn’t include inflation.

A well defined exit strategy is required to profit in the stock market.  Since so much can go wrong once a position is initiated, successful traders create an exit plan before they enter the trade.  I plan to include many more articles on exit strategies, but the following is a good introduction.

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