Do any of the above sound familiar to you? I bet all four. So let's see if we can do something to improve the selling process.
1. You don't have to sell all at once.
Whether you are taking a profit or cutting a loss, no one will ring a bell when a stock has reached its absolute peak or nadir. Try selling a stock in increments.
2. Bring some order into your trading life with sell orders.
One method of incremental selling is to use a type of sell order called a trailing stop order. Basically, if a stock that is on the way up declines by a certain percentage, a trigger to sell is pulled. I am going to be honest before getting deeper into this: Reading about this strategy may be headache-inducing for many investors, but it really is worth your time to learn about it—it may make you money or, at the very least, save you some.
It works like this: If your stock goes from $30 to $40, you could enter a 3 percent trailing stop order that would start out at $38.80 (3 percent below $40). If the stock rises to $50, the stop order would rise to $48.50. If the stock then retreats to that price, your sell order becomes a market order, and hopefully you'll sell at around $48.50. There is the potential that the stock can trade well below $48.50, which means you'd sell at a lower price.
If you'd be unwilling to sell below $48.50, you could also make the trailing order a trailing stop-limit order, which would protect against selling below that level. (You can use percentage gains or dollar gains to implement this strategy. I think using a percentage makes more sense because if the stock goes higher and you are set on a dollar figure, that figure would become a lower proportion of your investment.)