Wanna Know| My Answer For When to Sell

Tiger_comments
2023-01-06

Hi, tigers. I receive all your questions and find that most of tigers want to learn about how to decide when to buy and sell stocks.

@Ah Meng @rinl @aiyoh79 @maricel @LMSunshine and many other tigers asked when to buy and when to sell.

I wanna know when I should cut loss. There has been many schools of thought.

Let's learn together how to use this indicator on Tiger Trade app.

Some retail investors prefer to cut losses by setting a fixed percentage, such as a 5% or 7% decline. But fixed percentage does not take into account that different stocks have different volatility.

Some stocks with low volatility may indeed need a stop loss when it is down 5%; but for stocks with high volatility, there may often be a 5% drop in a day. Therefore, we should consider the different volatility of individual stocks.

The ATR indicator can take the volatility of individual stocks into account.

ATR Helps You Decide When to Sell

  • ATR (Average True Range), as the name suggests, is the calculation of the true volatility range of each stock on a daily basis.

The equation for calculating ATR is complicated, but we don't need to do the math because almost all trading platforms provide ATR indicator. All you need to do is click on this button and choose ATR on Tiger Trade app

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On your desktop app

The orange line in the chart is the stock's daily ATR. For example,$Pfizer(PFE)$ current ATR is 1.16. It means that for the last 20 days, Pfizer's stock price fluctuated within the range of 1.16$.

Two Formulas of ATR Tell You When to Sell

1. The stock price you bought it - 2 x ATR= your stop-loss point

Take Pfizer for example, today's ATR is 1.16. Suppose we buy Pfizer at the current price of $49.66, the stop-loss price is: 49.66 - 2* 1.16 = 47.34.

When the stock price falls to/below 47.34, we should cut losses.

2. The price of recent high - 2 x ATR= your take-profit point

Again using Pfizer as an example, let's say you buy Pfizer at the current price of $49.66. Pfizer's recent high was $54.93; and ATR for that day was $1.07.

If Pfizer fell from the high to 54.93 - 2.14=52.79, you should take profit and close the position.

Note: I use 2x in this formula but you can set this parameter between 1-3 times.

Risk Warning

There is no statistical advantage to using ATR for stop-loss or trailing take profit. However, it takes into account the volatility of individual stocks relative to fixed percentage.

We should be aware that the stock market and the world situation are very volatile right now. With the possibility of a Black Swan event happening at any time, and we should not rely too much on the numbers.

However, it can give us a practical and actionable trading discipline.

📒How to participate:

Join our topic and introduce your familiar technical indicators:

  • Introduce one simple indicator to help us know when to buy and sell.

You can follow the format of this article and try to explain:

  • 1. what is this indicator?
  • 2. how to use this indicator?
  • 3. what is the risk and advantage of this indicator?

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Introduce an Indicator to Decide When to Buy/Sell
Most of tigers want to learn about how to decide when to buy and sell stocks. We really need brilliant tigers to help us answer this question! ----- [TOPIC] Introduce one simple indicator to help us know when to buy and sell. [FORMAT] Explain 1. what is this indicator? 2. how to use this indicator? 3. what is the risk and advantage of this indicator? ----- [REWARDS] 1. One post with the highest quality will get a $10 stock voucher. 2. Three posts with the top 3 likes will get $5 stock voucher. 3. Every valid posts above 50 characters will get at least 50 tiger coins.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • Fenger1188
    2023-01-06
    Fenger1188
    市场还是一样很乱😓起一点跌很多…以为新的一年会有改善…可惜[傲娇]还是一样跌…现在那些科技龙头股，全部都败北…我的大多数股票我都清了。
    我还留着$特斯拉(TSLA)$这支股，虽然这支股表现差强人意，不过我还是一如既往看好它。
    目前特斯拉的股价已经“崩溃”，投资者不应押注该股短期内会反弹。
    特斯拉股票因为一些不利因素，导致特斯拉股票大暴跌，其实股价疲弱，这对看好者来说，这=是大减价买到好货。
    危机就是机会，股票不会一直涨或下跌。就像之前大多数中概股也大暴跌，目前中国开始开放，中概股就像乘上火箭一样大暴涨。
    相信在不久的未特斯拉股票也会出现非常剧烈的反弹！我会继续买入更多特斯拉股票作为长期投资！
    • StarLuck: 
      加油。㊗️您好运💪💪💪🌈🌈🌈🍀🍀🍀
    • Fenger1188: 
      🍀🍀🍀
  • Ratt
    2023-01-06
    Ratt
    Thank you for this, tiger should help out in point new users in right directions. With interests rates rising, stocks are get hit hard, but in long run they return high. But not all Tesla got a big hit and going for lost, I blame his truck with false info in miles, once a big company puts out report on a new product and gives it a bad one, that poor stock drops. I'm little worried about covic from China travel may start the meds stock to raise again, and some of us may not get on the roller-coaster. This year going to test a lot of us. We see at the end who wins or not.
  • AliceSam
    2023-01-06
    AliceSam
    ATR的两个公式告诉你什么时候卖出


    1.你买的股票价格-2xATR=止损点
    以辉瑞为例，今天的ATR是1.16。假设我们以49.66美元的现价收购辉瑞，止损价格为：49.66-2*1.16=47.34。


    当股价跌至/低于47.34时，我们应该减少损失。
    • AliceSam: 
      2.价格近期高点-2x ATR=你的获利点
      再次以辉瑞为例，假设你以49.66美元的当前价格购买辉瑞。辉瑞最近的高点是54.93美元；当天的ATR是1.07美元。


      如果辉瑞从高点跌至54.93-2.14=52.79，你应该获利平仓。
  • Ah_Meng
    2023-01-10
    Ah_Meng
    I have never used ATR but thanks to 🐯 captain, I now have another reference for me to test. Won't be using blindly but just learning its various limitations.
    In exchange, I will share a simple  indicator. First, technical term: RSI (Relative strength index). I am not going into the details of the computation as they could be looked up easily. But as the namesake suggests, it is about the strength indication within a certain time frame. The most common time frame is 14 days. However, 🐯 app uses 6, 16, 24 days.
    Next, I will use a common ETF (AGQ) as an example. There are two charts, one main, one sub-chart. RSI is in the sub-chart. It is common to use 30-70 band. When the chart is below 30 (lowest band), it indicates a stock is oversold. Above 80 indicates overbought. With 3 lines, when all three crossed the 30 or 70 bands, the respective oversold and overbought becomes stronger. The chart below indicated that AGQ was oversold around Sep 2022, signalling a likely reversal of trend.
    • Ah_MengReplyHelenJanet: 
      Not detailed enough as I have run out of space... [Facepalm]
    • HelenJanet: 
      Thanks for the detail sharing on RSI Technical Indicator 👍👍
    • Ah_Meng: 
      Please read the above with another comment also by me to be complete. I have run out of lines with the initial sharing. Thanks 🙏🏻!
  • Ah_Meng
    2023-01-10
    Ah_Meng
    Btw, 14 days is the most common time frame, so corresponding 16 days in 🐯 app is a good indication of overbought or oversold as seen in the sub-chart. One weakness is that the chart could be oversold or overbought for some time. It is just an indication that a trend inversion is imminent rather than immediate. It provides a likely entry or exit point but must be considered with other trend indicators to be comprehensive. It is simple tool for early warning, so thought to share it here. Feel free to add your comments or thoughts.
    • Ah_MengReplyAh_Meng: 
      Really should have drafted the whole thing in a separate sheet and not as comment. I hope I have not managed to confuse too many people with my numerous additional postings. Anyway, there appears little interest in my comments, so probably no harm done. Feel free to clarify if you chance upon this.
    • Ah_MengReplyAh_Meng: 
      Another add-on info about RSI. The one 🐯 app used have three time frames and supposedly corresponding to 3 upper and lower bands. The 6-day corresponds to 20 and 80 bands. The 16-day to 30 and 70 bands and 24-day corresponds to 40-60 bands. That's why the three lines don't reach the same extreme.
    • Ah_Meng: 
      This is the follow-up post from my initial posting.
  • LMSunshine
    2023-01-06
    LMSunshine
    @KYHBKO @Ericdao @melson Join this your speciality $5-10 stock voucher❣️
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