Good investors focus on risk. Risk is the downside. Bernard Baruch said it well when he said nobody ever went broke taking a profit. - Sam Zell
This is a classic rule in trading, yet it has little meaning. Anytime you have a positive profit, you can take it, yet you are likely leaving money on the table. Simply put, do you take profits on what could be noise or price variation due to current volatility?
Perhaps better to take profits against valuation. This requires some valuation statement that may be a mistake, but it is a better requirement for profit-taking.
Nobody ever went broke selling at or above fair value.
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