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11 Methods to Book Profit in the Stock Market is a 2 part series in which we are discussing profit booking strategy. In the first part, we discussed, 5 important points and in this 2nd part, we will discuss balance 6 Methods to Book Profit in the Stock Market.

6. Stock or Stock Market Cycle: The best time to enter in a stock or index during the accumulation phase. Similarly, the best time to book profit is during the distribution phase.

7. Correlation with the index: If there is NO correlation then you need not worry about the stock market movement for profit booking. However, a stock with correlation with the index will under-perform if the index is expected to fall or is in a distribution phase. You can check the correlation with the help of an excel function or visually as i shared in the stock talk series.

8. Bad news in stock is the right time to exit the stock as we have seen in case of banks that NPA news in the bank can bring the stock down as much as 50%.

9. FII holding in a stock is a must watch. The stock tends to underperform if the FII’s are reducing their stake. However, the impact of mutual fund holding or investment by any ace investor is negligible.

10. Change in the Management of the company is a good time to book profit if you are not sure about the credentials of the new management of the company. The big players give a lot of importance to the strength of management.

11. Most of the retail investors are not able to book profit due to indecision. It is the biggest problem.

Lastly, do not regret if you exited early. A profit is a profit and always remember that only 15% of investors are profitable in the stock market.