Knowing when to sell stocks is one of the most difficult aspects of investing. While there is no shortage of advice on buying strategies (whether value, growth or momentum), there's a lot less written by those in the know about how investors can apply some logic to their selling decisions.
Studies do show that, when making money on a trade, people often take profits early to lock in the gain but, when losing money on a trade, most people choose to take the "risky" option by running losses and holding the stock. Unfortunately, good investors usually do the exact opposite - they cut their losses and run their profits!
The approach to selling however does depend on the underlying strategy - a value/quality would see selling very differently to a momentum investor. Value investing legend Ben Graham suggested selling after a price increase of 50% while growth and momentum-focused US fund manager William O'Neill looks for rapid breakout, momentum stocks and bails out of non-performing duds as quickly as possible. As a stark contrast to both, HYP investor, Stephen Bland, argues that one should never sell.