When to take profits from stock trading?

Avoid pulling out everything; instead, let it grow. Think about long-term investing, not just short-term.

Once you pick a stock you like, only sell if you watch the price raise enough to sell or wait till it drops and buy more to grow your portfolio. It is not fun when you sell, and the price keeps going up or takes a week to drop back down to the price you can capitalize on.

But with stocks, you have to be careful and take your profits. With EFTs, you can buy and hold, but you decide which stocks and EFTs you are confident in and in good standing. Then some you could be willing to trade because it doesn’t seem like a solid long-term thing.

You could put lesser money into trades and hold on to index funds. As a long-term investor, it’s better to let returns compound over the years to maximize your wealth.

It is important to remember that when you are trading, your objective must be protecting principal. It might be counterintuitive, but profiting from stocks comes second.

That said, there are several trading tactics you can execute, which lets you know how to take profits.

One of the most recommended strategies is to take all or most of your profits when your stocks climb 20% to 35%.

By selling a portion of your stock, you lock in the gains and get to watch your wealth accumulate.

Yes, you do risk losing out on additional profits when there is a huge run-up, but as the old adage goes: You never go broke by taking a profit.

If you are a long-term investor, particularly if you are holding onto index funds, you should simply wait it out until you are ready to utilize these investments.