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Online Share Trading

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how much to sell?

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CandyO
Occasional Contributor
As a new trader I often wonder about this.... If I bought 100 Harmony shares @ R70 last week (R7000)and now they are selling @ R90 (R9000) - do I sell only enough shares to take the profit of R2000 (ie 22 shares @ R90)keeping the balance of shares (78 @ R70 )- or should I sell the whole lot @ R90 - and wait for the price to drop to buy them back again?
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29 REPLIES 29
Not applicable
how were YOU planning on exiting the position?
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prancing_horse
Super Contributor
To start with I'd say R7000 is too little to start trading, but if bought at R70 after costs the price paid would be clase to R71. Likewise when selling you have your costs.However if you still insist in purchasing such a small amount I'd say sell the lot, as the transaction cost for the few you have left, will hurt when you eventually sell them.
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CHATTYCHAT
Super Contributor
Agreed - the direct cost as per this example comes to 4,75 p.c. CGT does not come into play, as the value on its own will not attract this - BUT, depending on the time line (holding is shorter than 3 years) the profit will be taxed as income - even worse!
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superstar
Regular Contributor
I knw you said trading but I have found many new "players" confusing trading with investing. In any event what is your game plan and if you don't have any, get one very quickly
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Rams
Super Contributor
Your profit on 22 shares will be 22 x 20(90-70 x 22) and not R 2000. If you sell all 100 shares, then the profit will be R2000. Always scale out of a position in thirds....sell 33, 33 then 33 shares to lock in profits. Ideally you want your last 33 to be at break-even. That is , your stop loss should equal or be less than the profit taken on the 66 shares. You will have one share left...put in a sell for R 2000 and there is always a nutcase like Superstar who will buy it from you.....
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Blik
Super Contributor
Ol Trading versus Investing thread again. If you are trading in that you consider yourelf a trader and are going to accept the tax and mental implications thereof, then yes, 7K is probably a bit little. However if you consider yourself a long term investor, and bought Harmony for the long run, whatever your reasons, and if you only have 7K to spend, then maybe not so bad - cause you can add to your position if future conditions are right. Maybe check out some of SPB webinars on the Just one Lap site for Trading vrs investing.
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SimonPB
Valued Contributor
most people arrive at the market claiming to be investors but actually being traders .. tis teh get rich quick mentality ..
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Brommie
Frequent Contributor
I have calculated that because of transaction fees, for any amount less than R 11 500 one is either totally in or totally out.
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CandyO
Occasional Contributor
Maybe I wasnt clear enough...lets say I bought 1000 shares at R74.00 amounting to R74 000.00 (plus costs) and currently the share is at R84.00 a share....(R10 000 up) do I sell them ALL and wait for them to drop so I can buy them back again? OR do I sell just enough shares (119 shares)at R84.00 to equal the profit of R10 000.00 that its currently up on? - thereby keeping the balance of 881 shares - hoping the shares will keep going up....
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CandyO
Occasional Contributor
Maybe I wasnt clear enough...lets say I bought 1000 shares at R74.00 amounting to R74 000.00 (plus costs) and currently the share is at R84.00 a share....(R10 000 up) do I sell them ALL and wait for them to drop so I can buy them back again? OR do I sell just enough shares (119 shares)at R84.00 to equal the profit of R10 000.00 that its currently up on? - thereby keeping the balance of 881 shares - hoping the shares will keep going up....
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CandyO
Occasional Contributor
Maybe I wasnt clear enough...lets say I bought 1000 shares at R74.00 amounting to R74 000.00 (plus costs) and currently the share is at R84.00 a share....(R10 000 up) do I sell them ALL and wait for them to drop so I can buy them back again? OR do I sell just enough shares (119 shares)at R84.00 to equal the profit of R10 000.00 that its currently up on? - thereby keeping the balance of 881 shares - hoping the shares will keep going up....
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CandyO
Occasional Contributor
Maybe I wasnt clear enough...lets say I bought 1000 shares at R74.00 amounting to R74 000.00 (plus costs) and currently the share is at R84.00 a share....(R10 000 up) do I sell them ALL and wait for them to drop so I can buy them back again? OR do I sell just enough shares (119 shares)at R84.00 to equal the profit of R10 000.00 that its currently up on? - thereby keeping the balance of 881 shares - hoping the shares will keep going up....
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Rams
Super Contributor
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Rams
Super Contributor
Read above for the answer to your question...Posted 7 days ago
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superstar
Regular Contributor
OK we now get the picture, thank you for emphasising your point. Molo Rams
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Blik
Super Contributor
Much depends on the initial reason you bought them. did you buy for short term capital gain, which would qualify as trading, or a long term growth investment? If you bought them for a short term trade, then no one ever got poor taking profit - but same phrase vein, no one got super rich from taking profit too soon. Only you can answer your own question. For some of my long term holdings, I have sold portions at profit, but others I keep adding, when the price is right. Decisions like these depend entirely on your strategy.
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kwagga
Super Contributor
This is something you determine before you buy your shares, not after you've bought. Personally I would take profit in increments with each new level of resistance on the way up. With HAR look at the chart I've added. I'd take profit two times. @82,@90. Also adjust your stop loss on the way up to prevent losses. http://chartupload.com/viewer.php?file=26666042473643327282.jpg
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SimonPB
Valued Contributor
agreed, except the old hoary about not going broke taking a profit .. sure tis true, but nobody got rich taking profits to early either ..
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Not applicable
dont quite agree with "no-ones ever gone broke taking profits",
I believe you can go broke taking profits early (if you're trading). If your system works 1 of 3 times and you lose (eg) R 1000 per trade but you keep taking profit early @ R 500. That means that for every 3 trades your down (500-1000-1000) R -1500. Over time you're going broke. Thats why you have a system with Risk-to-reward ratio and you stick to it.
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