Take Portion of Your Profits and Never Risk More than 50% of Your Profit
This is a risk reducing attitude to bank some profit, you’ll have money to spend if you are unlucky enough to go through a series of bad trades. Traders/ investors have to rely on themselves for market opinion and they have large egos, especially when they have a series of successful trading.
Decide your direction, where you headed
The basic trading technique is clear for winning positions, if the fundamentals continue to look good and are supported by a favourable price trend, do not take profits. Add a wrinkle, if you are doing particularly well, you should cut some of winning positions to keep the a balance in your portfolio and take cash out of the market.
Before you take out your profits from the market, you have to make sure to avoid greedy temptation. Because most of times, investors happens to take the profits but re-invest the same at even higher prices than they have sold. When markets are high and you book portion of your profit, you have to take money to low risk investments, other than equity. It would be best idea to pay debts, loans, when markets are high.
If the market goes dull, you’ll have patience to stand in market since you take out the part of your profit. Also, you should keep the Mark-to-Market your positions to avoid eliminating your profits.
.
Also you like to read :
Always Mark to Market (M2M) Your Positions
Is the Reward enough to the Risk you are taking?
The Smarter takes longer to succeed
.
Related Reading:
It is good to have profit aside, currently market is also weak actually bank deposits give higher return than stock market.
What a great resource!