Right Time to Book Profit in Share Market


Though the title of this blog may sound quite intriguing, technically it is quite simple. This is the ultimate dilemma that traders face regularly. Investors know the advantages of booking profit in share market. However, many novice investors are unaware of the value of booking profit in share market and finish at losing their money. Because of insufficient knowledge of the stock market for beginners can cause major loss. So, it is very important to learn about the trades before jumping into the stock market.

If you are a novice trader and want to learn about the right time to book profit in share market. You have come to the right place. In this article, we will offer you a systematic approach that can be very productive if you put in a trade.

Why You need to Book Profit in Share Market

Everyone’s is aware of the volatility of the share market. It is the condition where the prices move unpredictably and vigorously. The investors who often invest in blue-chip have no fear of volatility. Because they are previously guaranteed of receiving maximum returns no matters what is the market condition. But, fewer investors know about that holding stocks for a long time may result in the misfortune. Indeed, it concurs that investors can invest for a long period of time to accumulate wealth in the stock market. But, without booking profit in share market can be risky for your investment portfolio. Keep in mind, if a share in your portfolio is become overvalued it is vital to book the profit. So it concludes that if an investor wants to play safely in the long term investment it is important know how trading works in stock market. To make big money from here it is very necessary to book profit in share market regularly.

When to Book Profit in Share Market?

Generally, there are main situations where the experienced investors must not worry to book profit. Let’s take a review.

  • Company News

    Many investors book profits on the basis of positive news about the company like it has extended to different states of India, or urban communities of India, or propelled another product, at that point, this organization shares will go higher at any condition. At this point, many investors buy share excessively. When the price of the shares is eventually increased, then investors can meet their financial goals by selling shares or booking profit in the share market. Many investors recommend that buy in the bad news and sell in the good news. But, don’t hurry in both situations. To grow the portfolio substantially, take the most gain in the 20%-25% range. Just like the company positive news, many investors book profit after seeing sector positive news. First, the price of the shares increases followed by the peak, then followed by the sell-off leading to a temporary slump.

  • Economic Data

    The economic data plays an important role in booking profit in share market. For instance, if the country’s economy goes down and the whole stock market condition crashes. Then the negative report of the economy will indicate that it is the right time for the investors to sell the shares at the stated market price. When investors selling their shares after analyzing negative data at the stated price, which means they are clinching their profits and protect themselves from the huge loss.

As per the experienced investors, do not book profit in a hurry when the company’s shares price goes high or well. Or do not panic when the company’s shares performance goes in a negative direction. You must set your financial goals appropriately and design a systematic plan to execute it.  Furthermore, experts also suggest that it is vital to research on the internet about company performance and other updates while selling shares and book profits in the shares market. All in all, manage your portfolio, do research work daily while buying and selling shares and achieve your financial goals effortlessly.

Points to Remember for Booking Profit in Share Market:

  • Experience investors believe that when it comes to buying and selling shares that they believe in booking profit at every rally.
  • Sell shares of the company when you experience that valuation of the company is becoming expensive.
  • The amount of sold shares directly depends on the valuation of the company.
  • Never book profit in share market on the basis of an emotional decision.

The closing words…….

As I learned from my experience that the stock market is unpredictable. If we hit at the right place we can get maximum returns, whereas if we hit at the wrong timely manner we can acquire huge losses. That’s why stock buying/selling should be done after understanding market condition. The last strategy that I saved for the last used by the experience investors is target based investing. For every investment, the investor set the target, once they exceed the growth target, the investor sell off the stocks and buy stocks that may be undervalued.  I must say, this is one of the best trading strategies for booking profit in share market for novice investors.

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