Considering that I'm writing a novel or a short story story (fiction) and I penned down the first draft. And then I began editing it, but how to make sure it doesn't require any more editing. I mean, many times few parts of my story appear fine to me in the very first draft itself. But my friends who read it ask me to improve it. And similarly, when I don't feel good about some part and I wish to improve it, they say, it's good enough. How can I do that myself?
If you're asking how you can know by yourself what you should edit, the answer is you can't. You will find some things in your personal editing passes, but everyone, even the biggest of big-name authors, needs an editor who can help them get past their personal blind spots and see the weaknesses and deficiencies in their work. That's what editors are for. For your purposes, your friends are beta readers are playing a vital role in letting you know which parts of your story need work.
The best advice I ever heard for when to stop editing was this: Stop once you're making it different, not making it better. There will come a point when, even if you think that a passage could be better, your continued edits aren't actually making it better. You can continue rearranging words, but you're not actually improving the story any. Once you get to this point, even if you're still not 100% satisfied with the story, it's time to quit with the editing and start with the submitting.
None of us are ever 100% satisfied with our writing. It's sufficient to get to the point where you say "this is the best that I can do," and leave it at that.