If you want to venture into the world of stock market trading, a visit to your local bookstore will yield hundreds of books on how to buy a winning stock.

But how do you know when to sell your shares?

Knowing when to sell a stock is as important as knowing when to buy it. Savvy investors have a 'sell discipline', or a set of conditions that will prompt them to sell stocks.

Here are some signals to watch for...

Like most investment decisions, selling is part science, part art. Unfortunately, for many investors, however, it amounts to sheer panic. They sell when their stock goes down. They sell when the entire market goes down. They sell when they read that the yen collapsed. In short, they sell for emotional reasons.

Economists like Meir Statman of Santa Clara University and psychologists like Daniel Kahnemann of Princeton University study decisions like this in an emerging discipline called behavioural finance.

What they've learned is that most investors are motivated by things such as fear of loss and fear of regret rather than by rational decisions designed to grow their money. These emotional, and irrational, decisions are just what successful investors must avoid. Instead, you want a 'sell discipline'. All that means is that you know which conditions will prompt you to sell.

What money managers do

When you ask money managers "what is your sell discipline?" their answers fall into two camps. Those who follow the value investing (click here to learn what value investing is) strategy give an answer like this: "I buy a company when it's selling for 50 cents on the dollar and I sell it once it is fully valued at a dollar."

The second answer comes from the growth school managers like Gary Pilgrim of PBHG Growth Fund (PBHGX) (Value or Growth? Click here for a learned opinion) and Bill O'Neill, publisher of Investor's Business Daily. They buy on momentum and sell when that momentum slows down. "Sell too early," O'Neill suggests, so that you don't get caught in the downdraft.

Well, these sell disciplines sound fine. But do they make sense for individual investors? Do they work for beginners and intermediates, or those who haven't built their own momentum? Maybe not.

Buying a down-and-dirty value stock is intimidating enough. To do it, you must have the conviction that it's going to come back. Selling a value stock when it reaches full price means that you must know how to analyse the company so you can determine that price.

If you're a growth investor, watching for a slowdown in trading volume might be more achievable but that's for traders.

How then do the rest of us decide when to sell?

Let's assume you?re a buy-and-hold investor rather than a trader. You've put together a group of stocks that you expect to hold for the long term, because you think the companies have solid long-term prospects. Now you need a sell discipline. Some experts buy a business with a good story to tell, one in a good area with a management team that is innovative and creative and sells "when the story changes".

Your job as a stock investor is to decide when the story changes. You have to avoid being trigger-happy.

On page two: Seven warning signs to look out for...