Master the art of selling shares: when to do it, key strategies, and everything you need to know

▶ Two Ways to Trade Stocks You Should Know

When we talk about participating in stock markets, there is a fundamental aspect that many traders forget: not all methods of selling stocks work the same way.

Direct ownership: Here you can sell or buy a listed stock only if you actually own it. It’s similar to selling real estate: buy at a certain price, wait for its value to increase in the market, and then sell for a profit. However, there is a clear limitation: if you do not own the asset, you cannot sell it.

Contracts for Difference (CFD): This modality has gained exponential popularity on online trading platforms. The main advantage is that you can sell or buy a listed stock without actually owning it. Your profit or loss depends solely on the price variation between the opening and closing of your position. This opens opportunities in both bullish and bearish markets.

▶ The critical factor many beginners ignore: market hours

Before making any selling decision, there is something that is absolutely decisive: understanding when the market where your stock is listed is actually open.

Worldwide, there are four main sessions: London, New York, Sydney, and Tokyo. Each opens and closes at specific times. For example, if you want to sell Mercedes-Benz (listed in Frankfurt), you need to wait until the European market is open, generally between 3:00 am and 11:00 am New York time. Outside this time range, your order simply will not be executed.

Important note: all markets close during weekends. No matter how urgent your need to sell, from Friday close to Monday open, transactions are not possible.

▶ Identifying the exact moment: signals indicating when to sell

The question every trader asks is: what is the optimal time to exit a position? The answer requires combining multiple analysis tools.

The power of confluences: The best traders look for what is known as “confluences”: multiple converging signals pointing in the same direction. A single signal can be misleading, but when you have three or four indicators confirming the same thing, the probability of success increases significantly.

Trend reversal as the main indicator: The most accessible way to identify when to sell is recognizing when an uptrend turns into a downtrend. This can manifest in various ways: lower highs, descending lows, or the crossover of long-term moving averages (such as the EMA of 50 crossing below the EMA of 100).

▶ Practical case 1: Twitter - technical analysis in action

Let’s observe Twitter’s performance between May and December 2021 as an educational example. The pattern is textbook: starting at 48 USD, followed by a peak above 71 USD (point A), then a retracement stopping above 64 USD (point B), creating what is known as “higher low.”

Later, a new high above 72 USD (point C) seemed to confirm the bullish trend. But here’s the crucial part: the next low (point D) was lower than the previous (point B). This is the first warning sign of trend reversal.

The pattern was confirmed when the next high (point E) turned out to be lower than the previous high ©. At that moment, technical indicators converged: a broken resistance now acting as a ceiling, the EMA of 50 crossing below the EMA of 100, and what advanced traders recognize as “bearish order block.”

With these confluences, a disciplined trader would have sold around 67 USD in mid-October. By December, the price had fallen to 40.59 USD, and it is currently trading below 34 USD. The difference represents significant gains for those who correctly identified these signals.

▶ Practical case 2: Netflix - when fundamental analysis is king

Sometimes, the real selling opportunity doesn’t come from lines on a chart but from the numbers behind the company.

Netflix showed spectacular growth from 2017 until late 2021. Its subscriber explosion in 2020 (increase of 21.90%) was driven by global lockdowns. However, the numbers began to slow alarmingly in 2021 with only 8.74% new users.

The most revealing came in 2022: the company not only stopped growing but lost 2.2 million subscribers. The causes were multiple: price hikes for users, increasing competition from Disney+, HBO Max, and Amazon Prime Video, reduction of the catalog in some regions.

Combining this fundamental analysis with technical tools (the EMA crossover in January 2022, the overbought signal of the stochastic in October), a trader would have clear sell signals above 520 USD, or even earlier, around 680 USD, if paying attention to the stochastic indicator. Today, Netflix trades above 176 USD.

The lesson: research the company’s actual finances, understand its business model, evaluate the competition. This often gives you an advantage greater than any technical indicator.

▶ How to execute stock sales in practice

The technical process is surprisingly simple. When you select a stock on your trading platform, you will typically see two main buttons: one to buy and another to sell.

Clicking on sell, you have two options: execute the sale immediately at the current price, or place a limit sell order (Sell Limit) that will automatically execute when the price reaches a level you define. The latter is especially useful when you cannot constantly monitor the market.

The manual process is minimal. The platform guides each step intuitively. The hard part is not clicking, but knowing where to click.

▶ Strategies and tips for serious traders

Master your psychology before risking real money

Here’s the secret no one wants to hear: most traders fail not due to lack of technical knowledge, but because of psychological weakness.

Practicing on a demo account with virtual money is essential, but it’s also deceptively easy. When real money is involved, something changes. The hand trembles, panic appears, logic disappears. Many traders abandon their perfectly designed strategies at the exact moment they need them most.

Develop discipline. Learn to accept losses without drama. Don’t try to recover your capital on the next trade. Resist the temptation to check your position every minute. If your exit plan is clear, let it act without emotional interference.

Stop Loss is your best friend, not your enemy

Non-negotiable: always place a Stop Loss. This is your lifeline when the market moves against you. You must define in advance what percentage of your capital you are willing to lose on a trade.

Practical example: buy Google (Alphabet) shares at 2,220.23 USD. Place a Stop Loss at 2,120.23 USD. If the price drops to that level, the position closes automatically with a 100 USD loss. No emotion, no indecision, no irrational hope for a rebound.

An advanced technique: after your position moves favorably, you can move the Stop Loss above the entry price. If you buy at 2,220.23 USD and the price rises to 2,320.23 USD, you can move the Stop Loss to 2,240.23 USD. If everything then falls, you close with a 20 USD profit, not a loss.

Consider leverage, but respect its risks

Leverage amplifies both your gains and your losses. A 1x leverage requires having the full funds available. With 10x, you only need 10% as margin, but risks are also multiplied.

For the previous Google example at 2,220.23 USD: with 1x, you need to have exactly that amount available. With 10x, you only need 222.02 USD. The difference in required margin is dramatic, but so is the potential risk if the market moves against you.

Fundamental research is your foundation

Before selling, you should have already done your homework: What does this company really sell? Is there emerging competition? Are its finances solid or deteriorating? What important news is coming?

Tesla is a modern example of this. It was the undisputed king of electric vehicles, but competition arrived inevitably. The adjustments in the stock’s valuation were a natural consequence of a changing economic reality.

Check the economic calendar. Earnings release dates, monetary policy announcements, employment data: all of these can cause sharp movements in your stocks. Information is power.

▶ Final summary: smart stock selling

Successfully selling stocks is not an spontaneous act. It’s the result of rigorous analysis, strategic patience, and emotional discipline.

Understand where and when you can sell (depends on market hours and your type of operation). Identify clear signals of trend change by combining technical and fundamental analysis. Execute your plan without hesitation. Protect your capital with Stop Loss. Keep your emotions under control.

The best traders are not those who make the most trades, but those who correctly apply their strategies at the exact right moment. When you master these principles, selling a stock will cease to be an anxious decision and become a systematic execution of your trading plan.