should i sell or wait?

[jojo77m]

If I bought £1000 worth of ABC shares at £1 each and the price rises to £2.5 I obviously could sell at £2.5 and take £2500
I understand that part...what I don't know is rebuying v's holding on.

If it went up to £3 and then started to fall (but I thought it'd raise back to £3 again) should I sell at £2 pocket £2k and then when it hits bottom at £1.75 and starts to bounce back up use the £2k to buy in again?

thanks

 

[Penny Picks]

Your best bet jojo is to use Stop Loss orders. ie: Stock at 2500 then you could protect yor profits by placing a "SELL" order a bit below the 2500 (ie 2350 or 2400) If the stock keeps moving up the you can move your S/L up right along with the rising price.

 

[Quantt]

If I bought £1000 worth of ABC shares at £1 each and the price rises to £2.5 I obviously could sell at £2.5 and take £2500
I understand that part...what I don't know is rebuying v's holding on.

If it went up to £3 and then started to fall (but I thought it'd raise back to £3 again) should I sell at £2 pocket £2k and then when it hits bottom at £1.75 and starts to bounce back up use the £2k to buy in again?

thanks

Frankly you should have a plan when to sell before you buy... if you do not have a plan it is a good idea to sell 1/2 to cash a bit at this price and then think of a strategy for the rest of the shares...

 

[jojo77m]

thanks for those replies but I'm still no clearer on the initial question.
is it more profitable to hold the original cheaper shares, or sell and rebuy more expensive ones using profits from the sale.

thanks

 

[Brumby]

is it more profitable to hold the original cheaper shares, or sell and rebuy more expensive ones using profits from the sale.

Based on your outlined parameters, it is profit neutral comparatively (except for additional commission in the sell and repurchase). Frankly if you cannot work out the simple maths associated with the two scenarios, I suggest you stay away from investing until you do.

 

[tomorton]

thanks for those replies but I'm still no clearer on the initial question.
is it more profitable to hold the original cheaper shares, or sell and rebuy more expensive ones using profits from the sale.

thanks

There are two reasons for holding shares - one is to obtain the dividend payments issued to shareholders, the other is to gain from the increase in the price of the share between purchase and sale.

It will be misleading to think of shares as being cheap or expensive as this implies they have an intrinsic value: they don't have a value, just a price. If the dividend is important to you for regular annual income, then the dividend value is more important than the share price. But as you are considering selling the shares I'm assuming you can do without this from these particular shares.

So your gains will come from appreciation of the share price. The time to buy is when the shares have a greater probability of rising in price. The time to sell is when they have a greater probability of falling in price. The fact that the price is higher now than it was some time ago does not mean there is a greater probability of price either rising or falling in the immediate future. So you originally asked the wrong question, hence the what seem to you obtuse replies.

Probability of price change can be concluded from either fundamental analysis of the company, or technical analysis of the share's price chart (or a blend of both approaches). Until you have educated yourself in either or both disciplines, this is the wrong time for you to be a shareholder. This site has lots of educational resources, just don't delay in bringing yourself up to a level of knowledge where you will know the right answer.

 

[barjon]

If I bought £1000 worth of ABC shares at £1 each and the price rises to £2.5 I obviously could sell at £2.5 and take £2500
I understand that part...what I don't know is rebuying v's holding on.

If it went up to £3 and then started to fall (but I thought it'd raise back to £3 again) should I sell at £2 pocket £2k and then when it hits bottom at £1.75 and starts to bounce back up use the £2k to buy in again?

thanks

The answer to your question is that it would more profitable to sell at £2 then re-buy at £1.75 when “it hits bottom” then rises back to £3.

There’s some big IFs in all that though:

1. How do you know it’s going to keep going down when it’s at £2? Might just turn round right there.

2. How do you know “it’s hit bottom” at £1.75? Might just keep going down.

3. How do you know it’s going to rise back up to £3? You don’t.

So, all in all, there’s no real answer to your question.

 

[sminicooper]

The answer to your question is that it would more profitable to sell at £2 then re-buy at £1.75 when “it hits bottom” then rises back to £3.

There’s some big IFs in all that though:

1. How do you know it’s going to keep going down when it’s at £2? Might just turn round right there.

2. How do you know “it’s hit bottom” at £1.75? Might just keep going down.

3. How do you know it’s going to rise back up to £3? You don’t.

So, all in all, there’s no real answer to your question.

That's why trading's not always easy!

With a correctly tried and tested set of exit rules possessing an edge, then it's simple just to obey the rules. Sometimes you'll lose out but overall you'll win.

 

[Penny Picks]

thanks for those replies but I'm still no clearer on the initial question.
is it more profitable to hold the original cheaper shares, or sell and rebuy more expensive ones using profits from the sale.

thanks

I'll take another crack at this jojo. If you hold onto the shares that will make you a "Long Term Investor" (You bought for your future) If the company has good fundamentals then you probably have a good idea.

However, if you buy a stock with the intention of selling it when it goes up in price, $1 $2 $3 dollars, then that makes you a "Trader"

Investors will normally buy into a managed portfolio for the best return.

IMOP, What it looks like is that you are gambling. Most "Traders" think they know what a stock is going to do before they place an order.

The accepted idiom in most trading course is "Plan Your Trade. Trade Your Plan."

An example. $200 trading account. An OTC stock with fair fundamentals, and GOOD technicals is at .015 cents. You can buy 13,000 shares for $195; you may have to adjust that to cover cost.
If the stock rises to .20 Cents you could then sell all 13000 shares for $2600. That's trading.:clap:

Is that actually possible? YEP.

This is how I do this. I have a good stock scanner service. If One catches my eye I do a quick check on Debt/Equity; High Debt to Low Equity is a throw away. I will then apply the stock to my indicators I use I have 2 favorites that must verify a trade.

If my indicators agree then I will jump into the deep end of the ocean. Also, I always use a Stop/Loss (S/L)

I hope this clears things up a bit for you. Good Trading RT...