Selling what you own. An alternative to Short Selling

So many times I have heard the regrets of not selling when the market has turned from  over bought levels. When the market is loosing its momentum. All these questioning only when the market has reached the bottoms, especially when the market is heavily oversold. We see the frenzied selling, as many prefer to sell or exit from the market during this time, when in actual fact they should be focusing on accumulation. There is no point crying over spilt Milk, instead you need to wait patiently till you see the next opportunity. Oversold areas aren't the best to sell and buy your own stocks. You need to wait for the right moment to do so.

Whether you want to sell now or when the market is higher does not matter as long as you know the risk of the trade. Just like the price could fall when you buy, the price can go up when you sell.

Selling what you own is called Shorting against the Box, in markets where short selling is permitted. In Sri Lanka it is not. So you can't short your own stocks. But you can sell your own stocks. Even if short selling is not available the same principle that applies to short selling can be applied, when selling your own stocks. But the strategy is to have your trading rules in place.

When you are selling your own stocks you need to have Sell, Buy and Stop rules, just like you have rules when you buy.

As many are asking me for strategies on Selling what you own, I will be posting trade ideas on selling your own stock, when the time is ripe.