InvestorQ : What is more important; stop loss or profit booking?
Nishant Chandani made post

What is more important; stop loss or profit booking?

Niraj Mehta answered.
3 years ago
Most day traders suffer from fear or greed. It is important for investors to not only cut their losses but also to book their profits once the target price is reached. That is called discipline. You need discipline both ways; for booking losses and booking profits. It is hard to say what is more important because both are equally important. Stop loss is your insurance against losses. Profit targets help you realize profits. After all, you only make profits when you sell, not when you hold. In intraday trading, a bird in the hand is worth two in the bush.
But you have another problem in intraday trading. You get into a stock and it shoots up and shows more potential. Then what do you do? It is better to respect your profit targets. Once you book profits don’t look beyond. A lot of people book out of a stock at Rs.100 and then keep regretting when the price goes up further to Rs.105. That is not the way intraday trading can be done. You have to look beyond and focus on new trades. Don’t keep looking back at your trades that are closed. What your book is more important in intraday trading. In case the individual thinks the stock has a further possibility of rising in price, the stop loss trigger must be readjusted to match this expectation. But this should be an exception and not a rule.