I love the tools we have here at StocksToTrade, especially Oracle, because they provide you with so much guidance in your trading…
Don’t get me wrong…As I always say, you have to put in the work. You won’t be a successful trader overnight.
You have to learn how to trade, continue to educate yourself, and practice, practice, practice your strategies.
And remember, the best way to practice those strategies when you’re new is by paper trading.
But I constantly remind my Daily Income Trader and StocksToTrade Advisory members to use the tools they have.
One thing this will do is prevent you from panic selling.
And I don’t just mean exiting a trade when the stock is going down…
Irrational selling also applies to getting out of a position when it’s going up—this happens when traders are afraid the stock will move against them and they’ll give back those gains they haven’t cashed out yet.
That’s why our StocksToTrade platform and Oracle are so great. They give you the technical levels you need so you know when it’s time to exit and when to hold on and let that winner run.
I realize it’s a little counterintuitive because, unlike panic selling during a loss, panic selling when a stock is up arises when things are actually going well.
You’re in the green, you see those unrealized profits, and the thought creeps in: “I better lock this in now before it slips away.”
Today, I’ll talk about why this happens, how to recognize it, and how you can develop the discipline to let your winners run.
Table of Contents
Why Do We Panic Sell Profits?
The fear of “giving back” gains stems from a deep-rooted sense of loss aversion.
Studies show that, psychologically, losses hurt twice as much as gains feel good.
This feeling is amplified in trading because market moves are often unpredictable, and the fear of a reversal can quickly push us to hit “sell” prematurely.
Another major reason is a lack of confidence in the stock or trade…
Maybe you entered a position on a whim, or the trade moved up faster than you expected, making you feel like you don’t fully understand why it’s in the green.
The result? With the idea of karma in mind, you worry that if you don’t cash out, the market will take away what it “gave you.”
Recognize the Signs of Premature Profit-Taking
Here are some signs you might be selling too soon:
You’re glued to the chart, watching every single uptick or downtick: This is a clear sign that you’re attached to unrealized gains rather than sticking to your plan.
Your hands are itching for the sell button the moment you’re in the green: If you’ve set your trade with a well-constructed exit strategy, this kind of reaction should be an abnormal one.
You feel immediate regret after closing a trade in the green: Like the reaction above, this indicates that you sold based on emotion rather than strategy.
Strategies to Avoid Premature Panic Selling
Define profit targets and stop losses, and hold firm to your plan: Before entering a trade, decide on your target.
Are you aiming for a 5% gain? 10%? Define your exit points, both on the upside and downside, and stick to them.
Use a tool like Oracle, to set your entry price, target and stop-loss level.
Not familiar with Oracle? Read my recent blog post to learn more about it.
Oracle scans the market every morning to gather critical data. It then generates a list of 15 to 20 stocks based on criteria such as price range, volatility and premarket volume.
Along with that list, you get an entry signal (green for long, red for short), and an entry price so you know exactly when to trade the stock.
Get Oracle, the tool I can’t trade without!
And if you’d like to see Oracle in action, we offer live demos every day. They’re completely free and run all day long.
Click here, drop your info, and join a session.
Setting a plan in advance of your trade gives you something to follow, which minimizes the influence of emotions.
Think in percentages, not dollar values: When you’re focused on a trade’s dollar value, it’s easy to get emotional about giving it back.
Dollar values are absolute and don’t give you an accurate picture of the stock’s movement compared to the purchase price and to the size of your account.
Thinking in percentages keeps you from getting too attached to exact dollar figures. Whether you’re up $100 or $1,000, it’s all relative to your account size and overall strategy.
Zoom out on the chart: A short-term view can amplify every little dip and spike, making you think that minor movements are bigger than they actually are.
Switching to a daily or weekly chart helps you see the broader trend, making you less reactive to short-term fluctuations.
In terms of technical indicators, I like to use 5-Minute instead of 1-Minute candles to watch my trades. I think that timeframe gives me the best information.
Remind yourself of the bigger goal: Are you trading for the short-term thrills or are you in this for the long haul to grow your account over time?
Staying disciplined with your plan—letting winners run, cutting losers early—is how you’ll see the compounding effect over weeks, months, and years.
If you can’t help it, take partial profits: If the urge to lock in gains is just too strong, consider scaling out of your position.
You can sell half your shares, secure a portion of the profit, and let the rest ride. It’s a compromise that helps satisfy that urge to cash out without fully closing the door on potential upside.
Use the right tools to execute your trading plan: I already mentioned Oracle, but our StocksToTrade platform is a great resource for setting stop losses and price targets, charting, stock screening and more.
I use it every day because it has everything traders like me look for in a platform. It also has a selection of add-on alert services, so you can stay ahead of the curve.
Grab your 14-day StocksToTrade trial today — it’s only $7!
My Final Thoughts…
Learning to control this particular kind of panic selling is about cultivating patience and focusing on the bigger picture.
A single trade doesn’t define your success…
Instead, it’s your ability to stay consistent over a series of trades. If you get into the habit of cutting every winner short, you’ll struggle to achieve real growth.
By shifting your focus from locking in every gain to maximizing profits within your strategy, you’ll see how sticking with winners pays off.
Embrace the discipline, ride out the fear, and let your trades work for you—because holding onto a solid plan is one of the smartest moves you can make in this game.
Have a great weekend, everyone. See you back here on Monday.
Don’t forget to watch for my 5-Stock Weekly Watchlist coming to your inbox on Sunday!
Tim Bohen
Lead Trainer, StocksToTrade
P.S.
The market is insane with post-election plays! I’ve been shouting this from the rooftops since last Tuesday…
But there’s something else that happened…
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On November 20th at 8 pm Eastern, I’m hosting The 2024 Election Alpha Surge Summit.
I’m going to dive deep into this post-election catalyst, its history, and its past gains…
Plus, I’m going to share the five stocks our AI system has already picked.
But you have to reserve a seat now!