Knowing when to sell your shares and stocks is critical to your achievement as a stock trader. This is known as share exit strategy, which is the most tricky judgment any investor has to make. With an excellent stock exit strategy, you will exit previous and for an improved price.
Usually, there are five fundamental share exit strategies in the stock exchange:
1) Price exit strategy: This strategy is based on Price patterns. Previous to you purchase a stock in the market, you will have to put an upper target price at which to sell. When the share price has reached the fixed target, you rapidly sell-off to get profit and move on to new stocks.
2) Period exit strategy: This strategy is useful when you have to buy and sell your stocks inside a period of time. In other words, you sell your stocks inside a time frame so that you can have the money for a few other reasons like purchasing another talented stock or investing in a few other financial assets.
3) Historical performance exit strategy: With this strategy, you sell your shares totally based on the past price trend of the shares.
4) Situational exit strategy: This strategy is applied because of the news event or situation. You exit the trade when there is a declaration that pushes up the share prices.
5) End of register exit strategy: With this strategy, you sell a stock at a day after the end of register to profit from dividends, incentive and capital approval. The date of end of register refers to the date at which members are free to the declared dividends or incentive.