When to sell your stocks?
To make money in stocks, you must protect the money you have. Always sell a stock it if falls 7-8% below what you paid for it. This basic principle helps you cap your potential downside.
Even the best stocks will sometimes breakout and then drop slightly below their ideal buy-point. When they do, they typically do not fall more than 8% below it. If your stock does decline more than 8%, it usually means something is wrong with your chosen entry point, the company, its industry, the general market, or all of the above.
Even if you sell at an 8% loss and the stock quickly rebounds, it does not mean you made the wrong decision. You were proactively protecting your portfolio. Taking a small loss from time to time is like paying an insurance premium to make sure you don't suffer a devastating hit. And you can always buy a stock back if it shows strength again. In a particularly weak or volatile market environment, you may choose to limit your loss, say, at 3-5%.