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Neopia's Fill in the Blank News Source | 26th day of Hunting, Yr 21
The Neopian Times Week 101 > Articles > Selling Strategy

Selling Strategy

by goldengirl411

STOCK MARKET - Many articles have been written about stocks - What they are, the benefit of investing, how to make wise decisions... but one question keeps coming up: Is there a selling strategy to follow?? Not being a common question that is actually asked on chat boards and editorials, this has not commonly been answered. So, is there a selling strategy? Truth is, there are very many. Almost every investor has their own selling strategy. Some are similar, some even exactly the same, while others are complete opposites. Lets take a look at some of the more common ones that you may have heard mentioned before:

Percentage Profit

Some people choose to sell all of their stocks at a set minimum profit percentage. For this, people usually have a set percentage, which is the minimum value that they sell all of their stocks, no matter what they bought them at. For example, lets say your minimum selling percentage for all your stocks is 100% profit. If you were to buy a stock at 15 Neopoints per share, you would have to wait until it hits 30 to sell it. If you bought a stock at 16, with the same profit percentage, you would have to wait until the stock reaches 32 to sell it.

Set Value

Other investors sell their stocks at one point, the same number for all companies. This strategy is rather simple. No matter what you bought your stock at, as soon as it reaches a certain number you just sell all of it at that. Lets say the number you picked as the one you want to sell all of your stocks at is 30. When any of your stocks reach that number, you sell every last share of that company, no matter what price you bought it at. If you have 1,000 of BOOM at 15, 1,000 of BOOM at 23, and 1,000 of TNAH at 17, and BOOM and TNAH go up to 30, you sell all those shares.

Spread Out

Others decide to sell their stocks at several different pre-set points. The "spread out" strategy means you don?t sell all the stocks you own of the same company at the same time. Instead, you have several points at which you sell your stock bit by bit. One version of the strategy has to do with percents. For instance, lets say you bought 1,000 shares of a company at 15 Neopoints a share, and your pre-set sale percents are 100% profit, and 200% profit... Try to pick at least two sale points. Then, lets say your stock goes up to 30 (which is 100% profit for you). You sell 250 shares, or 1/4, of the stock at that point. Then, your stock goes up to 45 (the 200% profit mark), at which you sell 500 more shares, or 50% of what you originally had. You now have the remaining 25% of your original total. You would hold onto these shares and see where the stock goes from then on, and sell if you see a profit that you really like in a while. The other version is almost the same, except with set numbers instead of percents. For example, sell 25% of your shares of a stock at 30, 50% of the shares at 45, and hold the remaining 25% of your shares in that stock to see what happens to it next.

Past Influence

Using this strategy requires more than just picking one or two numbers to sell everything at. The "past influence" strategy is based on picking an individual selling point for each of your stocks. For this, you have to study the patterns of how stocks moved in the past, and determine a point at which you think it would be logical to sell each stock. For example, the highest point of SWNC is 220 up to date. It has an average of almost 40. It?s not a stock that commonly sits at 6 Neopoints per share without moving at all for several months. So based on that information, the selling point you might pick for SWNC might be pretty high, maybe around the 70's. Now, the stock STFP has a high of 31 points, and average of less than 11. For STFP, you might pick a lower selling point, maybe in the 30's or 40's. Do this for all of your stocks, and sell them once they reach your desired selling point.

Selling Range

Another strategy to consider is the "selling range". This is one that I use, but it proves to be rather unreliable in some cases. The way it works is you pick a range in which you will sell your stocks. The range can be as wide as you want, but try picking a range of about 15 points, say from 45 - 60. If one of your stocks goes up to 45, you could already sell, or you could wait and sell if it goes higher. Basically, you sell your stocks at any point from 45 to 60. In my opinion this can be a bit unstable, because lets say if your stock goes to 50, and you think it can go higher, but it drops below your selling range and you lost your chance. The strategy is partially based on your instinct. Although it does not have an exact selling point, if you are lucky you can make a nice profit by using it. Selling on "the dip"

A common and rather profitable selling strategy. Pick a selling point that will be the minimum at which you sell. If your minimum selling point is 45, when your stock reaches that, you wait to see what it will do next. If it rises, continue to watch it, maximizing your profit. As soon as it drops even one point, sell, unless it falls below your minimum selling point. This selling strategy is pretty simple, as long as you have the patience to wait and watch what your stock does instead of selling it straight away.

Daytrading

Ah yes, daytrading! Though rather risky, daytrading can be a great way of getting several thousand of Neopoints quickly. Pick a stock that's heading up and that you are almost sure will continue rising. Buy some shares and wait for a day, and sell at the end of a day if you've made a profit. Most of the time if the stock goes up, it does not rise more than 5 or 10 points, so the profit wont be very big, but if you need quick Neopoints you might consider trying this. This strategy sometimes fails and can result in loss of Neopoints, but remember, whatever you do, do not sell at a loss.

That just about wraps up the most common forms of selling strategies, however there are many more out there. You don?t have to follow any selling strategy, but in the end having a strategy does make it easier to decide when to sell and make a good profit. If you are looking for a selling strategy instead of just randomly selling your stocks, here are a few things you should keep in mind before coming up with a strategy:

-Buy low, sell high - Pretty self-explanatory, eh?
-Never sell at a loss - Another reinforcement of buy low, sell high. You only lose Neopoints if you sell below what you paid. If your stocks go down, don?t sell them under fear of them going down further, just wait a while because chances are they will go up eventually.
-Be patient - Stocks can take several months to go up to a decent profit point, so just be patient with them. Don?t get impatient and sell before what you usually sell at just because the stocks haven?t moved up for a long time.
-Use common sense - Okay, that may sound a bit awkward... but seriously, I would not suggest picking a selling strategy that has to do with selling stocks if their first letter matches the first letter of the month, or anything of that sort. Try to include logic in your strategy, a pattern, a reason why you chose it. If your strategy is similar to the "first letter of the month" one, there is only a slight chance you will make a decent profit off any of your stocks.

It could be quite a while before you find the selling strategy you like. It may be one of the ones mentioned above, or it may be another one that you came up with. If you start testing out a strategy but end up not liking it, there's nothing wrong with switching to another one, but once you find one that works for you it is better to be consistent and follow it through every time. Good luck finding a selling strategy, and good luck stock marketing!


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