🎯 Mastering the Art of Selling

It takes time and experience to master selling, but until then, use these rules to guide your decisions.

Selling is one of the most critical—and often most difficult—parts of trading. It requires skill, discipline, and experience. Until you develop that intuition, these structured rules can help guide your decisions and protect your profits.

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🛡️ After Entry: Manage Risk First

• Initial Stop Loss:
  Set a 10% stop loss from your average buy price.
  If triggered, exit the full position immediately.

• Proactive Risk Control:
  If the stock closes 5% below your average buy, consider cutting 50% of your position early to preserve capital.

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📈 Managing a Winning Trade

Once your trade starts working, shift from defense to offense. Use key moving averages to manage your position and scale out profits.

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✅ In Strong Market Conditions

Let your winners run—but with structure.

• First Trim (Swing Portion):
  Sell 25% on a close below the 20-day moving average (20DMA).

• Next Reduction:
  Sell 50% of the remaining position if the stock closes below the 10-week moving average (10WMA).

• Final Hold:
  Keep the remaining 25% as long as:

  • The price stays above the 30-week moving average (30WMA)

  • The 30WMA continues to slope upward

📊 Strong Market Breakdown:

• 20DMA: 25%

• 10WMA: 50%

• 30WMA or Breakeven: 25%

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⚠️ In Weak Market Conditions

Take profits faster. Be aggressive.

• First Trim:
  Sell 50% on a close below the 20DMA

• Next Reduction:
  Sell 25% on a close below the 10WMA

• Final Exit:
  Exit the remaining 25% either:

  • On a close below the 30WMA, or

  • If the stock revisits your average buy price

📊 Weak Market Breakdown:

• 20DMA: 50%

• 10WMA: 25%

• 30WMA or Breakeven: 25%

  

Note - Closing should be wide range candle with volumes below the key moving averages.

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