How to Exit Momentum Stock

For the last more than four quarters majority of the stocks have declined more than 50% with some of the listed companies getting wiped out. This has resulted in the portfolio of the individuals being badly affected. Therefore it is very important to know the right time of selling or existing from the stock as people who intend to hold the share for long experience the pain of watching the prices of the stock go down.

Some traders have made money even when this devastation was happening therefore it is important to find out the strategies employed by those savvy traders. It was observed that traders who followed the trends are able to take advantage of the trend and make money. They do not try to sell or buy at the tops and the bottoms, but take cues from the market itself of the starting of a particular trend and separate their emotions while deciding the exit strategy.

There is no one exit price level of a stock, but one has to exit at multiple price points while the trend is continuing. The first sign of exit should be when the stock is making abnormal gains and the volume begins to decline as the momentum is breaking, one should start existing a stock and the trend trader would have existed 50% of the positions when the stock makes a 10 days low in pricing and the balance of the stock should be sold before it makes a 20 day low on pricing.