Different people have different answers to how to take profits in the stock market. It is strongly related to the level of risk you can accept and your investment decision-making basis, making it an art that varies from person to person and requires flexible handling. I have also combined the profit-taking methods I have used in the past and will mainly use in the future to extract three methods, and discuss them with everyone.
1. Profit-taking based on returns (more suitable for funds)
This is the profit-taking method I used when I started investing in funds. I would start taking profits when the expected return rate is reached, such as 30% or 50%. Personally, I choose to sell one-third when the return rate reaches 30%, then sell the remaining two-thirds after another 30% increase (the second one-third = half of the remaining two-thirds), and finally sell all when the return rate increases by another 30%. The aim is to secure the gains, but in a rising market, there is a high probability of missing out on further price increases even after selling.
When applied to stocks, such as buying at a price of 10 yuan, rising by 30% to 13 yuan and selling 1/3, then rising by 30% to 17 yuan and selling the remaining 1/2, selling all when it rises to 22 yuan, the overall average selling price is approximately 16.3, with a total profit margin of 63%. The premise here is not to choose junk companies, and some judgment ability is still required.
Based on historical data to define a reasonable range, setting the upper limit of the range as the profit-taking point.
Warren Buffett mentioned in his letter to shareholders that the stock prices of many companies fluctuate between severe undervaluation and severe overvaluation. Applied in the stock market, it is the PE/PB relative valuation method, which can be used in the futu app's fundamental analysis, selecting data from the past decade, where both the historical data of the company...