Strategic insights for effective stock selling with Sarge

Hey, mooers!

The Importance of Exit Strategy 🌟

The session kicked off with Sarge emphasizing how integral a well-planned exit strategy is to successful investing. Knowing when to sell is crucial not just for capitalizing on potential gains but also for protecting them, which can significantly impact your investment outcome.

Sarge emphasized the importance of establishing specific sell targets immediately after purchasing stocks. He suggested using technical analysis to identify indicated resistance levels which might serve as potential sell points.

Highlighting real examples, Sarge noted that CEO changes could signal both risk and opportunity. For instance, a new CEO with a strong track record might boost stock value, but if the transition seems unstable, it could be a trigger to sell before a potential decline. He used the example of Starbucks, which surged after appointing a new CEO known for turnaround successes.

Risk Management 📌

Sarge shared his stringent rule of setting a maximum loss limit of 8%. This rule has helped him minimize significant losses and preserve capital by automatically triggering a sale if a stock falls 8% below the purchase price.

Fractional Trading Behavior (1/8 Trading) 🔄

Sarge also discussed his approach to fractional trading, specifically the 1/8 trading rule, where he considers selling or buying in fractions such as 1/8 of the total volume to help avoid large-scale impacts from price fluctuations. This method allows for gradual adjustment to the position, providing for a more balanced approach to both entering and exiting trades.