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Hello all,
We all are quite concerned with which stock to buy or which is the right price to enter in a particular stock. But the main reason why most traders and investors lose money is that they don’t book at the time when the exit condition gets triggered or better to say that they don’t have any exit condition at all. It’s quite funny that when you enter into in stock either through your study or someone’s recommendation, you may have a fair idea of the company or you buy at a breakout or support level. Still, when you want to book profit, you are unclear about that. Either you have not decided it while you take an entry or your advisor didn’t give exit level and left it on your judgement. Here lies the problem. You must have seen good profit but didn’t book and at the end of the day booked loss, or you have booked profit, and the stock moved up, and you think, why did you book so early or you made a loss starting from the entry itself and don’t know when to stop your losses.
Here goes our suggestions:-
- If you are looking for a particular increment of capital, then once it reaches, do exit. After your booking, it will move high for sure, but don’t feel dejected due to this. That’s the expected behaviour of the market. You need to accept and make peace with yourself.
- You need to know how much you are supposed to a loss in that trade/investment. It’s a wrong concept that you should not put an SL in investment. If you don’t, there will be many Yesbank, Reliance capital and Suzlon energy in your portfolio. Once you make that loss, don’t analyze anything—just exit from the trade. After creating a door, if you need, then do the analysis and future course of entry. But book the loss. You will have both winners and losers as well in your portfolio. That’s how the market works.
- Usually, for investors, the best holding period is infinity. But at the same time in this changing regime, you need to be on your toe to find out the rapid changes in the global scenario. If your company continues the similar growth performance, you are having quite a fantastic time holding that company, but in case, your company starts lagging its growth potential it has been boasting. Time is ripe to exit from the investment without any emotional attachment.
Therefore, it’s mandatory to note the down the entry even before you exit, if you are following any advisor, make sure you ask him about it before making an entry as per his recommendation.
Wish you all a great expiry ahead. If you want to get personalized trading guidance then do get connected to us.
Regards,
StockTradingF&O