The Bull Hunters Guide

I have spoken about many stock market strategies, touching on the DJIA or Dow Jones. We have been over the US stock market and ways to understand how to make money with the correct share strategies. Today I want to talk about one of the outcomes of a successful trade; The Profit and the underlying benefits. In other words: when do you take a profit and where do you put the profits?

Taking Profits When Trading

I haven’t got a more straight answer than this. Decide before you place the trade. How much profit would you be happy to take or make? 20%, 50%, 100%? Then if you reach the target, take it. Cash it in there and then. Don’t hesitate! I will give you a great example of a trade that I didn’t set a profit target on. I bought 90000 options on a stock for 3cents each. That cost me around $2,700. I was happy to take the risk and lose the lot. Yes, hardly a great strategy but the gambler does come out if you don’t plan your trades.

Beware the Gambler

Here’s the strategy I call “The Zero Strategy“. $2,700 of 3 cent shares. The stock went up to over $1.00 and the options became worth around 80cents each. Not bad in 15-16 months. My $2,700 was now $72,000! That’s around 2600% Return On Investment. I didn’t take it though. Why? Well, there were a few reasons. One was that I KNEW the stock would keep going up. And it did. Another 10cents or so.

Down Goes The Stock Market

Then it came down. I’ve still got the stock and it’s worth about $17,000 and still in a pretty good margin. When will I sell it? Probably never! It’s too good a story to tell. It’s priceless! So now, what on earth has this got to do with The Gamblers $18,000 Piano? I only put that in the headline so you’d read this… Just Kidding! I bought some other shares around the same time and here comes the Grand Piano…

The Stock Markets Grand Piano

I bought 2000 shares for $1.59 each. This time there was a plan in place. An ambitious one, but realistic however. A uranium explorer. My friend had 3 Million of these shares and bought them for less than 3 cents. He sold them around 45-50 cents. Work out the profit on that! Absolutely Massive! My plan was to sell these shares at $9.00. They got to $9.06 and I sold them, turning $3,180 into $18,120. Then I proceeded to chip in a bit and buy a Grand Piano for my son who now has won a few competitions and wants to become a Concert Pianist when he grows up.

Where is the price on those shares now? Who cares! The stock market sponsored my Kid and gave me memories to enjoy for years to come. (The shares went on to over $11.00 then dropped very fast to $6.00)

So when do you take your profits? When you have something fun to spend the money with. There are always profits to be made. Just know when to take them home with you.

Sometimes the Bullhunter has to be Bearish.

Sean Rasmussen
The Bullhunters Guide
Universal Wealth Creation © 2004 - 2007

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This entry was posted on Monday, November 5th, 2007 at 10:58 pm and is filed under Bearish, Bullhunter, DJIA, Dow Jones, Investment, Make Money, Share Strategies, Stock Market. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.