Golden Rule in Trading: Lock in Your Profits

In the trading world, there is an immutable lesson that every investor must remember: if you don't sell, you don't truly create profit. Asset prices don't rise indefinitely; at some point, they will fall, and if you wait too long, your profit may turn into a loss. Why is Taking Profit Important? The market is always unpredictable. Expecting prices to continue to rise without a specific profit-taking plan often leads to missed opportunities. A small but certain profit is always better than waiting for the perfect profit-taking point that never comes. Simple Strategy to Effectively Lock in Profits Below are some strategies you can apply to ensure profitability: Set Goals Before Trading: Before participating in trading, determine the level of profit you want to achieve. This helps you avoid being carried away by emotions or greed when prices fluctuate. Use Stop-Loss Order: A stop loss order not only helps you limit losses but can also be used as a tool to protect profits when prices have reached high levels. Partial Profit Taking: Instead of waiting to sell all when the price reaches its peak, sell a portion of your assets when you are in profit. This way, you can both preserve a portion of the profit and keep the opportunity if the price continues to rise. A Reality Reminder Imagine you buy an asset for $100. Then the price increases to $150. You want to hold on until the price reaches $200, but unexpectedly, the price drops sharply to $80. Instead of waiting for an uncertain outcome, if you take profit at $150, you have secured a 50% profit - a smart and practical decision. The Last Lesson Profit is just a number on paper until you actually take the profit. Don't let greed cloud your judgment, and don't forget that the main goal of trading is to preserve profits. Trade with discipline, make decisions based on the plan outlined, and always be ready to act to protect your gains. Remember: A small but certain profit is always better than vague expectations with no conclusion.