Profit Taking

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DEFINITION of 'Profit Taking'

The action of selling stock to cash in on a sharp rise. This action pushes prices down temporarily. When traders are profit taking, the implication is that there is an upward trend in the security.

INVESTOPEDIA EXPLAINS 'Profit Taking'

For example, in the media you might hear something like this: "Markets were down today as traders took some profits off the table." It's common for prices to retract to some extent even in bull markets.

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