The first indicator that you should sell your stock is when its value drops through the arbitrary floor you have set. Usually this is set about 6 to 8 percent below the price. Losing value could mean that the company is not doing well and is going to fall.  When this happens, you should sell the stock, it is better to take a smaller loss than to keep investing on a dying stock.

Another sign that you should sell is when the company itself starts to struggle and its finance is looking bad. When this happens you should start looking over things and assess the risk and money involved in sticking with your investment.  This would mean trouble for your investment, unless there is a good plan to lift the company.  If a change in the business is not in plan, or even a change of CEO or board of director, then it would be best to just sell your stock.

Last sign to sell is when the market value of your stock is overpriced; this is usually a setup for the companyâ??s fall and can be tracked with stock option software if you track it closely. The strategy you can employ here is to sell while it is overpriced, and if it rebounds, you can buy it back for a fraction of the price you sold it. However, it could also easily keep going up, and if that is the case, well,  it is still always better to be safe than sorry anyway.