When To Take Profits In Stocks? Knowing Right Time Is Key To Learning How To Invest

IBD readers may already be familiar with the golden rule of selling: cut losses at 7%. In short, take at least some profits when a stock gains 20% to 25% from the buy point. IBD founder William O'Neil crafted this rule in 1961, when he noticed that after stocks break out of well-formed bases, they tend to run up 20% to 25% before correcting again. This is your default guideline for profit-taking and you should not deviate from it without careful consideration.