Investor Education: Learn To Earn: Lessons From Investors.com Can Pay Off Nicely

For many, that whipsaw action drove home the importance of knowing when to sell and when to buy.

In recent sessions the market has begun to rally but it remains to be seen whether the uptrend will hold.

For individual investors, the big moves and roller coaster action can be confusing. That's why it's important to be proactive with your portfolio and brush up on your buying and selling skills ahead of time.

IBD's Learning Center helps you build skills for spotting danger signs so you can tell if a stock is breaking down.

On the flip side, the courses also teach you how to buy at the right time so you'll be able to find leading stocks as a new rally gets underway.

The Learning Center can be found by clicking on the "How To Invest" tab at the top right side of the investors.com home page.

Once inside, start with Course I -- "How To Select The Right Stocks At The Right Time." The 11 lessons it contains explain the characteristics of leading stocks and show you how to find them and buy them correctly.

You'll learn to evaluate stocks objectively and compare their fundamental traits, such as earnings and sales growth.

How To Tell?

It also teaches you how to tell if big institutional investors such as mutual funds are buying or selling the stock you're considering. It shows you how to determine which sectors and industries are at the forefront of a rally.

In addition to the lessons on fundamental analysis, the section also contains lessons on technical analysis.

You'll learn how to read a price and volume chart, and gauge how a stock is faring. It also shows you various chart patterns that many of the market's biggest winners have formed before they went on to launch their runs.

But buying is only half the equation. Knowing when to sell is just as important. Course II -- "How To Sell Stocks To Maximize Your Profits" -- contains sell rules that will help you preserve your capital and protect your profits.

The series begins with Lesson I titled "Selling Stocks To Cut Losses." It discusses the importance of selling or cutting your losses if a stock drops 7% to 8% below the price you bought in at. Think of it as an insurance policy. Though you'll suffer a small loss, you'll still have capital left in your portfolio to invest another day.

The second lesson in the series shows you how to decide when to sell a winning stock and lock in a profit. This can be one of the toughest decisions an investor faces.

Tips For Taking Profits

Say you bought into a stock early in its run and you're now sitting on a hefty profit of 50%, 80% or even 100%.

Do you hang on and hope it will continue to climb or do you sell and take your money off the table?

The lesson shows you how to spot chart moves that signal the stock is breaking down.

For instance if a stock begins to fall on very heavy volume, it's often a sign big institutional investors are selling.

You should follow their lead. This is particularly true if a stock crashes through a key area of support, such as the 50-day moving average line, on heavy volume. Learning to spot such signs can help you avoid investing pitfalls.