How to exit a stock at the right time? (2019 Guide)

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How to exit a stock at the right time?

It is true that nobody can time the markets perfectly but with some research and clever planning, you can fine-tune your exit timing. You must have experienced yourself that taking an entry into a trade is much easier than getting out of it. The timing of the exit has a huge impact on the outcome of the trade.

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History suggests that retail investors are not so good at market timing. Most of the times, they are late entrants to the market. Selling is much difficult and equally important as buying. In this article, you will get to know how to exit a stock at the right time.


The big money is not in the buying and selling, but in the waiting.

exit a stock

These are the most common factors that people look for when they take a decision to exit a stock.

  • Fundamental of the stock is deteriorating.
  • You bought a stock hoping for triggers but that didn’t happen.
  • Your price target is achieved.
  • Sell when a stock is overvalued.
  • Your stock has a shockingly high price-to-earnings ratio (P/E ).
  • The company’s competitive advantage is in danger.
  • The company makes drastic changes in its direction or leadership.
  • The company’s sales are stalling or falling.
  • The company’s profit margins (and earnings) are shrinking.
  • The company recently cut its dividend payment


But all of these are secondary reasons. These are not completely incorrect but these are all secondary and not the major reason due to which one can exit a stock. Off-course you might be thinking what is primary then?

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