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DEEP RESEARCH · INVESTMENT PRINCIPLES · SELLING

How Should I Sell?

A study note restructuring Mark Minervini's selling rules from Think & Trade Like a Champion into a 5-step frame

Published: 2025-12-14 · Trading principles · Source: Original Naver Blog post

You are responsible for your own investment decisions. This material is research and is not a buy or sell recommendation.

0. Bottom line first

Selling is a process: first decide which of the two regimes you are in (selling into strength vs. selling into weakness), then — just like buying — narrow down from the bird's-eye view through long-term trend → chart pattern/fundamentals → recent price & volume. To keep fear and regret in check, you need numeric rules on risk/reward before you sit down to sell.

  • Without the big picture, you become a victim of fear and regret.
  • Selling into strength means "sell where there are buyers" — essential when the position is large or liquidity is thin.
  • Selling into weakness means "react fast once the trend breaks" — it tends to arrive unexpectedly.
  • Use base counting to estimate whether you are early or late in the up-cycle.
  • If you are willing to risk an 8% stop, you need a reward that matches it — bailing out at 5–6% gives you bad risk-reward.

1. The two selling scenarios

Sell into strength

When price moves in your direction

When there are plenty of buyers, sell into the strength. This is the professional's method, especially when you have a large position to unload or when liquidity is the constraint — you leave "not when you want to, but when you can."

Sell into weakness

When the trend turns

When a comfortably rising stock loses momentum and the trend rolls over, profits must be protected. This usually happens when you are least expecting it, so speed of response matters more than perfection.

Official fact: Minervini explicitly says both selling plans begin with a "bird's-eye view" of the big picture. — Think & Trade Like a Champion, Mark Minervini (Korean edition by Millie's Library)

2. Base counting — where are you in the up-cycle?

In a long advance, you need to know whether you are watching the first leg, the second leg, or the late stage of a long-term run. Counting bases helps you tell early-stage from late-stage.

  • Early base: give it room and time to advance.
  • Late base: in a late bull market and a late expansion phase, the move can be the "last burst of flame before collapse."
  • Golden window: more than 90% of the big advances start during market corrections — that is when names sitting on early-to-mid-stage bases offer the best entry.
  • Defining the first base: the first plateau after a bear market is counted as base one.

Interpretation: Late bases become more and more obvious to more and more people. As they do, buyers pile in until only potential sellers are left — the moment a pattern is "obvious to everyone" is usually already a distribution zone.

3. The selling process — from bird's-eye to surgical

A 4-stage decision funnelSame order for both buying and selling
Long-term trendMust run in your favor
Chart patternCurrent base/structure
FundamentalsEarnings momentum
Price & volumeRecent days — surgical detail
This funnel produces the concrete entry or exit timing.

Selling follows the same arc. You have to start with the big picture and use that bird's-eye view to read the context of current price action. Without it, you fall prey to fears ("what if I sell and it pops?") and regrets ("why didn't I sell back there?") — both of which are, as Minervini reminds us, the underlying engines of trading emotion.

4. Catching the top — climax runs and the Qualcomm case

A stock that has been climbing healthily for months will, at some point, accelerate into the steepest angle of the whole advance. That is the moment to lock in some or all of the profit. There are stretches where a stock rises 70–80% in just 5–10 days.

Qualcomm, Nov 1999: +260% in just two months, then -88%. The textbook path after a climax run.

Official fact: "Did heavy volume show up on a down day? If so, you've watched big institutions exit a position… Distribution happens on the way up. Institutions sell into strength, when everything looks good." — same book.

5. Numeric rules that mute fear and regret

Long-term trend and chart pattern aren't enough on their own. You need rules grounded in your own numbers, because without them you cannot keep the edge.

Example — what an 8% stop really implies: you buy at $100 and set the stop at $92. Are you going to sell at $105 or $106 (a 5–6% gain)? Many people say yes. Why? Fear. But if you only intended to take 5–6%, why were you willing to risk 8% in the first place? The reward/risk is upside-down — selling too quickly without a justified reason is exactly the kind of move you will regret later.

Interpretation: The essence of selling is not "what you watch" but "under what rule you watch it." Define the stop and the target-R in advance and the system pulls the trigger, not the emotion.

Sources

Naver original