Updated: Feb 3
The hardest part of trading on Football Index is often knowing when to sell.
It can be very difficult to sell shares perfectly at their peak price and there are so many variable to consider, some of which may be completely unpredictable. However, below are some of the key considerations which can be used to help you decide whether it is time to sell or not.
1. Does the player suit the current / upcoming market trend?
Market trends can massively influence a player's price for a short period of time. On September 11th the below players were highlighted as some of the 'Best under 23's in the Champions League from non-pb leagues'. As you can see the average price of these players increased by 43.1% whilst this trend was at it's peak. This is now down to 26.6% as the trend of buying these players has started to wear off.
If many players that share similar characteristics are rising in price irrespective of having an improved chance of earning dividends - it is likely these players are rising due to a market trend.
If so, it is best to sell after or during their rise. If their rise is very sharp and in a short space of time often it will be better to sell whilst they are on the way up and take the profit by market selling.
If the rise is more gradual, then it may be wise to hold until the gradual rise appears to have flattened out. *The opposite is often true when buying. When a drop appears to have flattened out, it can sometimes be wise to buy.
For example, Szoboszlai rose from £1.68 to £2.04 in the last week of September. After this dramatic rise in price, Szoboszlai's price stopped increasing and hovered around £2 between 29/09/2019 - 01/10/2019 and has dropped since to £1.63. *This is also partly due to transfer rumours relating to Szoboszlai have subsided and money in the market is currently going into strong PB performers in PB leagues.
When the boom in price has stopped, it is often wise to sell unless the player's circumstance have significantly improved so much so that their increase in price is completely justifiable.
2. How much higher could their price go?
It can be important to look into both the ceiling of a player's price and to consider what their dividend return could look like.
Factors to consider when looking at the potential price ceiling of a player:
PB Potential - does their style of play suit the PB matrix
MB pull - often influenced by the above factors as well as name
Previous PB scores and dividend returns can often be used to help indicate how much a player will return in dividends. Older players may return dividends, but, could still decrease in price as their value in 3 years time becomes less as they age.
If they do not have a particularly high price ceiling, but, have already risen in price considerably due to high PB scores - it can often be wise to take the profit and reinvest into future dividend winners who have not risen so much yet.
Currently, traders are buying strong PB players due to the rewards (High returns) that come from the increased dividends. It is important to consider a players potential percentage dividend yield and consider the risks involved in holding older players that will be worth a lot less in 3 years time.
For example, Santi Cazorla has a strong chance of earning dividends this season as currently one of La Liga's best players who also suits the PB matrix. However, he has already risen 400% over the last year and so has to be seen as a risky hold at age 34.
3. Are they a short term, medium term or long term hold?
Short term - If you have bought a player for a short term hold, based on speculation of a player increasing in price perhaps due to a market trend, transfer speculation, fixtures etc it is important to sell once the player's price has increased due to the positive upcoming factors that you anticipated coming into fruition. *It can be easy to keep what was supposed to be a short term hold for longer as you see the rise in price and do not want to miss out on a further increase in price, but, often it is best to sell and take the profit after a short term rise.
Medium term - Future chances of earning dividends may be improved and so flexibility is often needed. Often you may buy a player without considering when you will look to sell and may instead assess your exit strategy based on what price the player will get to. You don't necessarily need an exit strategy at all as circumstances of player's are forever changing. The key here is to not hold onto stagnant players for too long.
Long term - Age is the main consideration here. If they are very young and are already showing their quality, often it will be best to hold. Football Index is continuing to grow and as prices increase, dividends are likely to increase over the years. Relatively low-priced youth players who have strong MB / PB potential could be extremely good value for a long term hold - despite not currently earning dividends regularly.
Equally important is to get out of overpriced youth players who do not make it when they take the step up to first-team football. In general my advice when buying youth is usually to go for proven youth players already showing their performance buzz capabilities or very cheap, youth players with a small potential downside, but, large potential upside in price. *Youth like Mason Greenwood carry too much risk and so may not necessarily be a great long term hold with their current prices being up their with the world's best already.
4. Is there better value elsewhere?
If you believe there is another player / players which are likely to rise more imminently and by more than the amount it would cost to sell your current player (After commission)- it would be best to sell. I would only advise doing this if you are very confident in the other player / players to avoid over-trading.
Whilst there is another market trend ongoing, such as money currently being ploughed into strong PB performers, it may be tempting to sell and buy into the existing trend.
If you can see value in a player who suits the trend but has not risen yet or if you can get on the trend early then you may be most profitable selling to buy into other players who will rise imminently. However, you should avoid chasing profits too much and only do this if the player you want to buy is likely to increase considerably more.
5. If injured, when will they return from injury?
Selling players just before they return from injury can be extremely profitable, especially if you bought whilst they had dipped upon injury. If a player is injured for a long duration of the season, it may be worth selling and using the funds in the meantime to buy other players.
6. Could any upcoming factors influence their price?
Consider which factors in the future could have a positive impact on the players price:
Injury of a team-mate leading to more game-time
Returning from injury shortly
Team is in good form
Champions League / Europa League later stages
7. What is there current form like?
Look at their recent PB scores, how many minutes they are getting and if there good form is likely to continue. If they are particularly young, it is likely they will have a another spell where they increase in price due to good form. If they are not young, it can often be wise to sell if they spike in price due to good form as if this form drops off they may fall in price.
If a player is playing poorly then often you will need to understand why and consider if this has already negatively impacted the player's price. If it has not already had a negative impact on the player's price, it can be wise to sell. However, if they have already dropped it may be worth waiting till they have a few good performances again before selling. If these good performances take too long to come, then it may be best to reinvest elsewhere *Some traders will buy out of form players once they have dropped to profit from the increase once they are in form again
If they are out of the team altogether and it looks unlikely they will be returning anytime soon, you may be left with a stagnant hold and so it is often best to sell.
8. What upcoming fixtures will they be playing in?
When looking at a player's upcoming fixtures it can be useful to look at:
If they will also be playing in International fixtures (EURO Qualifiers / EURO 2020 fixtures in particular as they are PB eligible)
How many upcoming fixtures they have (within the next 30 days for IPD)
The difficulty of opposition
If they have games on single / double / treble days
If a player you wish to sell has favourable fixtures coming up then you may wish to keep them for the favourable fixtures.
Alternatively, if their price increases because of the upcoming fixtures, but, you wish to sell you may be able to use this an opportunity to sell to the market, sometimes at a slightly higher price.
Understand why a player has risen in price - if it is because they are being pumped on Twitter / Facebook, more times than not it is best to sell
Hype and speculation from other traders can carry a player's price past good value - at this point look to sell
Avoid holding stagnant players for too long - unless a future spike is likely
Avoid panic selling just because others are doing so
Avoid selling players when they drop because of a short-term injury
Avoid instant selling on large spreads
Avoid instant selling if it is likely you can market sell