Ep 138: [Live Webinar] Stock Market Q+A & Profit Taking

★ SUMMARY ★
In this video, I’m going to answer some common questions about the stock market. Also, we’re going to talk about taking profits, why it’s important, when to do it and how to do it in order to be profitable in the market.

In the stock trading business, your goal is to take profits, just like in any other business. Periodic profit taking creates consistency and reduces risk.

Taking profits is more important than “When” to take them. A lot of people focus on when they should take profits, but most traders don’t even take profits. They get into a stock and then they get out of it right away, or let their money sit there and they don’t take profits out of the market.

If you want to be an active trader, compound, and make more money, you need to be constantly taking profits and reinvesting them.

“When to take your profits” will depend on your risk and money management system or style. Because everybody has a different risk tolerance, everybody has a different amount of capital and a different personality.

A lot of people try to look at another person’s system and copy what they do. But when it comes to financial decisions, you need to discover what works for you. Don’t look at somebody else and mimic exactly what they do. You can use ideas and concepts to get insights and adjust your system, but ultimately you need to find what works specifically for you.

Most beginner traders go all in and then they go all out right away, which is not a very good way to take profits. The smart way to take profits is all about scaling. You shouldn’t get in 5000 shares of Tesla in one single day. That’s not what professional traders do. Instead, they stack it. And they get in and out of positions little by little, in quarters or halves. And this way, they reduce their risk.

Beginners usually think “I could’ve made more if I had held into the stock or if I had gone all in from the beginning” Yes, you could’ve, but that way you’re not managing your risk, and if things go against you, you’ll lose a lot of money.

What’s your goal?

Your goal in the stock market is to be profitable at the end of each month, at the end of each week, each quarter or at the end of each year, depending on how you trade.

You need to look at your income and your expenses to figure out if you’re profitable or not. It doesn’t matter when you take your profits, what matters is that you are profitable at the end of the day. And consistency is key. You don’t want to be profitable for one or two months only, you want to continue being profitable for the long run.

Posted at: http://tradersfly.com/2017/06/ep-138-live-webinar/

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12 COMMENTS

  6. Hey Sasha,
    Its so nice of you to answer the questions in this much depth and spare your valuable time.
    I find all your videos very helpful to learn the chart reading.

    I have one question.
    If the market index is signaling a downward move and a company chart is giving a positive break out, being the both i.e. index and chart signaling opposite direction move, will it be advisable to take position in such stock.
    In a nut shell, is it prudent to take position in the opposite direction of the index?

  7. This video already proved itself. Ironic that I watched it this morning pre market up 20% on a stock, and then the Nasdaq got pummeled. Should have taken profits earlier! Thanks so much Sasha!

  10. I think I understand why professionals are really pushing hard for new people to rush into stocks. I get emails like buy this program now! Or this bull market will not last for ever or look , this Chinese stock is going up just like we predicted! They want new people to rush in so they dump ( bear down) and a killing?. Thank you Shasa for letting us know.

  12. Thank you, Sasha. I really, really appreciate the content you are providing. It is so valuable and has helped me be a lot less scared of 'the market' because I feel like I now have both the vocabulary and a few starting tools and insights to understand it better on my own. I don't know if this is on your list of things videos to make (or if this already exists) but do you think you could make a video dedicated to the 'foundations of researching a company or subject matter' for a trade, and where to even start? Obviously you wouldn't provide recommendations on which ones to invest in, but, for example, perhaps you could break it down into the different considerations you take into account (or how-to) when researching: 1) a long standing company; 2) a small or medium sized company and 3) a company new on the market. There is just so much information out there that as a new trader…outside of looking at their website and financial reports I wonder if there are other things I should be looking at too. Haha, im sure this subject matter could easily be one of your longer courses but to simply have a 'foundations of trading research' video would help so much! If this isn't of interest to you but you know any books or resources you could direct me to I would greatly appreciate it.

    Thanks again! And keep the content coming 🙂

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