Today I made some good profits on my investment. Within one months I get a return of 50% on my investment. Achiving my desired targets, I quickly sold my stocks. It is importsnt to set some expectation before investing as once you get to the desired result, you won't feel regret. However there are moment in stock trading that may make us feel regret. Like it happened with me. Soon I sold my share at my desired value, the prices rose further 15 points. The stock has pretty good fundamental and has been on upward trend in last 5 session. As soon as my targets achieved I pulled out of my investment.
It is the human tendency to regret on seeing the price rise after existing from a share holding. People do regret or feel sad, for pre existing from the holding. However the share market is always un predictable. Anything could happen to any share and we may see a down trend on the share next day. But the regret is painful. This is not the first time such thing happened to me. It happened multiple times. Now with experience and from past learning, I found some peactical approach to avoid the regret feeling :
When a stock hits our short-term target, we have three options:
Book full profit and move on.
Book partial profit and let the rest ride.
Hold with a trailing stop loss to capture higher gains.
- For Long-Term Holding : One can use the 200-day SMA as a stop loss to safeguard profits.
- For Short-Term Holding : Set realistic short-term targets by multiplying the company’s EPS growth (after quarterly results) by its current P/E ratio. This method is generally valid until the next quarter.
Example:
Current P/E = 16
EPS Growth = 25%
Target P/E = (16 × 25/100) + 16 = 20 P/E
A disciplined approach with clear targets and strategies helps us avoid emotional decisions and regrets while investing.
Peace!!
Namaste @steemflow
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I did it so many times and bangs my head afterwards. I need to learn more.
Thanks for the advice.