Monday, January 28, 2013

Taking Profit

For positions that I bought in 2012,  I'm taking profit on 40-60% of the position.   Psychologically, this enables me to have a win/win/win situation.   The first win is I have a profitable trade.  The second win is I continue to make money if the stock goes up.  The third win is I can buy back my sold position if the stock price falls.

I'm using this strategy for stocks that have been in a price trading ranges for six months or more.  I will sell part of the position near the top of the channel, and buy back near the bottom of the channel.  In many cases, I will be correct to assume the trading channel will continue.  However, for the few that breakout above the top line (resistance) of the channel, I will participate in the further gain with about 50% of the position.

For more on Strategies and Plans, check back every Monday  for a new segment.

This is not financial or investing advice. Please consult a professional advisor.

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