In this presentation — When Do I Sell? — I explore why selling is the hardest part of investing. We’ll look at the many reasons investors sell, the common pitfalls we’ve all fallen into, and then I’ll share the framework I use today. I support this with recent examples of stocks I’ve sold, and finish with a look at some of my current holdings and how I’m thinking about potential exit points.
1. Introduction
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Selling is the hardest decision in investing.
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Paper trading can’t capture the psychology.
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Biases: anchoring to entry, waiting for breakeven, falling in love with a story.
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My biggest past issue: cutting winners too soon.
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Improved by using a framework + building skill at buying back in when I’ve sold too early.
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It’s not about winning every hand. It’s about stacking probabilities. Fold when odds aren’t in your favour and wait for the better hand.
2. Reasons People Sell
(broad, neutral list — not judged, meant to spark recognition)
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Technical breakdown
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Falling through support or resistance levels.
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Overbought / oversold indicators.
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Moving average crossovers (general).
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Breakdown of a clear trend.
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Change in investment thesis
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Fundamentals shift.
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Earnings downgrades.
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Significant earnings misses.
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Portfolio reshaping
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Selling weaker positions to fund higher conviction opportunities.
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Rebalancing for risk control.
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Market-driven selling
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Fear of crashes, recessions, geopolitical shocks.
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Personal reasons
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Tax planning.
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Liquidity needs.
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Behavioural reasons
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Chasing another idea.
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Boredom / story fatigue.
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Overconfidence in calling tops.
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Profit-taking
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Locking in gains.
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“You never go broke taking a profit” — first heard this from Rene Rivkin as one of his rules. I’ve come to realise thinking like this cost me a lot of money as it often means cutting winners too soon.
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Capitulation
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Selling because you just can’t bear the pain anymore.
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This last one, capitulation, is where we cross into pitfalls. When selling shifts from disciplined to emotional.
3. Pitfalls
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Anchoring to entry price.
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Waiting for breakeven.
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Selling too soon (my biggest past issue) – happy with a quick profit.
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Falling in love with a story/company.
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Not admitting you’re wrong quickly (and refusing to buy back in).
4. My Framework
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Multi-period analysis (monthly, weekly, daily alignment).
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3EMA crossovers — my consistent technical signal.
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Fundamental triggers:
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Change in investment thesis (downgrades/misses).
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Selling weaker positions to fund stronger conviction ideas.
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Other indicators I’ve trialled but don’t rely on now:
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ATR trailing stops.
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% fall rules.
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Dollar-loss limits (% of portfolio).
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5. Case Studies – some recent sells
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Trigger: Technical weakness led to sell and recent unexplained CEO change added risk.
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Outcome: Stock has slowly continued to trend lower.
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Lesson: A stricter application of my rules would have captured more profit.
- Trigger: Cross of 10 and 21 day EMA.
- Outcome: Stock has slowly continued to trend lower.
- Lesson: A stricter application of my rules would have captured more profit.
- Trigger: An acquisition that I perceived to be high risk / capital raise putting pressure on the share price / weakening technical picture.
- Outcome: Stock has continued to trend lower.
- Lesson: Application of my methodology has saved me from being stuck in falling stock in a rising market.
- Trigger: change of trend, moving averages crossing below one another.
- Outcome: stock fell for a few weeks after only to start a new uptrend just above $200
- Lesson: No regrets. Followed the process which saved me from some sleepless nights for a few weeks. I was aware when the trend turned favourable again and chose not to buy back in having moved on an invested elsewhere.
MRE
Trigger: Conversation with an ASA member that I highly respect
Outcome: I sold but should have done so much sooner
Lesson: Don’t allow my biases to blur my judgement!
6. Portfolio walk-through – when would I sell?
A change in fundamentals – ie shifting from increasing profits to falling profits, a significant fall in earnings, a poorly justified change in leadership or a significant acquisition that I perceive changes the risk profile of the business.
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DVP – close below 21 day EMA
- GDG | ZIP | VYS | GNP | CGS | SRV | KYP | TEA – 10 day EMA crosses below 21 day EMA.
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RMD – 10 day EMA crosses below 125 day EMA
- CCL | FWD – have held through a 10 day cross of the 21 day EMA but would likely sell if it happened again to protect profits but would depend when it occurred.
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SRV → Sold, then re-entered lower.
7. Wrap-Up
Selling is the hardest decision. There are many reasons investors sell — some rational, others emotional traps. My journey has been about moving from cutting winners too early to developing a more disciplined framework. I’m now better at cutting losers, holding winners, and buying back in when I’ve sold too soon. In the end, it’s about consistency and discipline: stacking the odds like in poker, and living to play the next hand.
Over time, consistency and discipline beat emotion.
8. Group Discussion
Prompts:
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What’s your biggest struggle with selling?
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Do you recognise yourself in any of these reasons or pitfalls?
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Do you set sell rules before you buy?
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Do you buy back in if you think you’ve sold too early?
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What’s been your best or worst sell?
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Looking ahead: how do you plan to improve your selling discipline?
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Presentation: When Do I Sell?