Have you ever sold a stock on a whim only to see its price rise later? I believe all of us are guilty of such a mistake. Is there an optimal price level to sell a stock at? Experienced traders would say that as long as the price is at a profitable level, it is optimal.
However, there is a better and quantifiable methodology to set an optimal sell price for a stock. This methodology relies on technical indicators, and one of the simplest indicators to use is the RSI, or Relative Strength Index.
Typically, when the RSI level goes above 70, the stock is considered to be in the overbought region. This means that there is a higher probability of a sell-off occurring since if something is overbought, it implies that demand has outstripped supply, leading to price appreciation (profits) for early buyers.
So, let’s say you already own 1 unit of AAPL (Apple) stock and you are keen to sell it at an optimal level. Well, at least you can boast to your spouse that “hey honey, I sold AAPL at a good level when it was in the overbought region”.
Using StockHero, you can create a Sell Bot to help you time the sale of your AAPL stock. After instructing the Sell Bot to sell your AAPL stock, you simply set the bot to sell AAPL when the RSI hits the oversold region. All done in a minute.
StockHero allows stock traders to trade with intelligence by offering a user-friendly interface for new and advanced traders alike. Your journey to becoming a better trader starts with StockHero!