As always accepted, online share trading offers profit and brings a high level of risk. Most investors are worried about the right time to square off their position and book profits. Consider some key points while deciding to continue holding a share to maximise your profit.
Let’s understand from below:
- When the share reaches expected return or price:
The basic understanding is that when a share climbs to an expected level, you can book your profit and exit from that position. You can also think of staying back to see if the share grows more. However, as online share trading is risky, take a second thought considering all the calculations made to arrive at the expected return level.
- When the share starts reacting negatively to a positive momentum:
This may be a tricky situation, but some shares do respond negatively to a positively moving market. Consider the example of Paytm. The share fell consistently even when markets were stable, and investors expected good returns. It was understood, by analysts and investors, that there was something wrong with the company’s operating capacity. It impacts investor sentiment, and they try to sell it without waiting for any other positive signal.
- When the market seems bearish for the share or that particular industry:
Sometimes, the markets are bearish for a specific business while good for others. Consider the situation two years back, when the pandemic hit globally and majorly all industries suffered. Aviation and entertainment suffered the most. Scenarios that affect shares due to market risk push investors to exit from that position and book returns, mostly unknown about the future market movement.
- When market volumes traded for that share get lowered:
Investors are keener to invest in more liquid shares. Hence, if you notice that trading volumes decreased for any of your shares, you may want to reconsider holding them in your portfolio. However, lowered trading volumes may also reflect investors may not even want to purchase your share. Again, this is a tricky situation, where you may have to hold the stock till the situation gets better.
- Study the financial reports of the company share:
You can do some financial research and analysis on your portfolio regularly. When you see a particular share falling below the expected levels based on analysis, you may think of squaring off the position to book the current profit.
One should perform online share trading systematically by considering all pros and cons of the investment. While some signals may give you decent profits, there may be others when you get protection from extended losses and risk to your portfolio.The best way to sustain is to act wisely and keep track of the markets to achieve the best results.
All the above signals can only work if you have the right share trading app by your side. So, before planning over the strategies, choosing the stocks for watchlist and ruling out enter and exit strategies, it is very crucial to choose the right trading partner.