Entry & Exit

It is very easy to say exit at the right time and re-enter at lower levels, practicing this concept is not all that easy. It is a futile exercise trying to exit at the top or buy at the bottom on a consistent basis as it is very difficult.
But, there is loads of money to be made by capturing the major part of a particular trend on a consistent basis. It is always better to adopt a strategy of exiting at different levels on a phased manner.
Investors may sell a portion of their holdings once their minimum target return is achieved. Another lot may be sold at the next desired level of return. Hold a portion of the exposure with a trailing stop-loss, as this would ensure that you participate in unusual price run-ups that one gets to see in a few stocks.
A similar graded approach may be used when it comes to buying a particular stock. While buying, never let the losses run beyond your zone of comfort.
Exit from long positions when the stock declines by a margin, which is just within your tolerable limits, and never hang on to a losing trade in the hope of a recovery, which invariably would turn out to be elusive.
Investors should not hold a loss making position beyond a threshold limit of about 10-12 per cent. Any stock would struggle to recover to its earlier highs after having recorded a decline in excess of 12-15 per cent. Unless you are convinced about the long-term prospects and fundamentals, never hold on to a position, which has dropped by over 15 per cent.

With inputs from The Hindu Business Line


Post a Comment

All comments are moderated. Please post no spam

Disclaimer & Privacy Policies

(c) Mrs. Ruby Christy. This site and contents are owned by Mrs. Ruby Christy;
Use of this website and/or services offered by us indicates your acceptance of our Disclaimer& Privacy Policies.

Information and opinions provided on this website (www.investchips.com) has been independently obtained from sources believed to be reliable. However, such information may include inaccuracies, errors or omissions. Investchips.com and its affiliates, information providers or content providers and R.John Christy and his Family shall have no liability to you or third parties for the accuracy, completeness, timeliness or correct sequencing of information available on this website or feeds, or for any decision made or action taken by you in reliance upon such information, or for the delay or interruption of such information. Investchips.com,its affiliates, information providers ,content providers and R. John Christy and his Family shall have no liability for investment decisions or other actions taken or made by you based on the information provided on this website. Any action you choose to take in the markets is totally your own responsibility. Investchips.com and R. John Christy and his Family will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. This information is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. Opinions expressed by R. John Christy are his own and not of his past, present and future employers.
The DoubleClick DART cookie is used by Google in the ads served on this websites displaying AdSense for content ads. When users visit this website and either view or click on an ad, a cookie may be dropped on that end user's browser.
  • Google, as a third party vendor, uses cookies to serve ads on this site.
  • Google's use of the DART cookie enables it to serve ads to your users based on their visit to this site and other sites on the Internet.
  • Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy.
  • www.investchips.com never collects any personal information of visitors.