What is "profit taking"

n. The act of extracting profit, as cash or equivalent, from an investment, often by selling part of it.

In finance, profit taking (or taking profits) is the practice of selling an asset, mostly shares, when the asset has risen in price. This allows investors to convert the increase of an asset's market value into cash.

Profit taking by a number of investors normally causes the price of the asset in question to fall temporarily. Nevertheless, the occasion of profit taking itself indicates an upward market trend.