Buy or Sell? When? How much? $STUDY #TheLastHonestMan

M1 Finance

This is a tough one, because there isn’t a good answer that fits all situations. You really need to make your own decisions here. I know it’s tough, but there’s some sage advice that covers it all;

Buy low. Sell high.

That’s much easier said than done.

Remember, you only take a loss when you sell at a loss, until that time it’s only a paper loss, or ‘unrealized capital loss’. The same with gains. So, if you have a stock that pays dividends, and the price is down, I would most likely just keep collecting the dividends and never ‘realize’ the capital loss.

I try to do that, but it doesn’t always work out that way.

When a stock is steadily moving up in price, it’s easy to buy some now and sell some later when the price has gone up. It’s wonderful when you sell at a profit. It’s a tiny bit less than wonderful when you sell at a loss, but it happens.

I try to make it a bit easier to decide with my watch lists, and charting helps a lot. I track daily and weekly price performance over 7 increasingly shorter time periods; for the daily charts it’s 1 year, 9 months, 6 months, 3 months, 21 days (4 weeks), 9 days (2 weeks) and 5 days (1 week), and for the weekly charts it’s 3 years, 2 years, 1.5 years (78 weeks), 1 year, 9 months (78 weeks), 9 months, and 13 weeks (3 months). I use the daily charts as short-term indicators and the weekly charts as long term-term indicators. I also utilize a linear regression reversal as another ‘buy’ or ‘sell’ signal. Sometimes it’s right, and sometimes it’s wrong.

Ultimately, the decision to buy or sell is not made based on these criteria alone. They merely aid the decision-making process. The decision to buy or sell is up to the individual investor, but you can use charts to help you make these decisions.

I hope to do a video soon on the charting process, and I hope it helps.

Trade smart, be happy, and stay profitable, my friends!

P.S. Usually, when I open a new position, I start with a small ‘starter’ position, and add to it if the price action is right. Similarly, when I sell a position, I like to ‘take a little off the top’ at first, then trim some more, and maybe trim a bit more, taking profits as they come. I try to never go ‘all-in’ on a new position because it could work against you, and sometimes in a big way. That’s not a good thing.

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