The 9 best tips for selling stocks

If there is any operation of vital importance to determine the success of your investment, that will be none other than the sales you develop in the stock markets. And especially it will be very important, not only to optimize the investment, but to protect your savings doors  especially unfavorable scenarios for your interests. You must know when to execute your sell order, and under what conditions.

With complete certainty that the difference of applying a good sale to one that is not will be enormous, and there will be many euros at stake, which you should not forgive under any circumstances. Surely more than once in your history as a small investor you will have wondered why you did not execute this order, and in this way you would have saved yourself a lot of trouble for the change. From now on you will no longer have excuses to repeat this unpleasant situation.

The first recommendation to successfully carry out your operations in the equity markets is to know when, and under what situations do you have to sell your shares in the stock markets. In some cases, it will simply be to close the operations and enjoy the capital gains generated from your operation. But in other cases it will be somewhat more complicated, and its main objective will be to protect the invested capital, even to prevent losses from becoming more acute and definitively installed during the next trading sessions.

However, this decision, which will be very personal, will depend on other variables that are not linked to the financial markets, much less to the share price. On the one hand, the profile you present as a retail investor. If you are aggressive, conservative or intermediate it will determine in a certain way the sell order. Like the term to which you direct your investment: short, medium or long. Depending on all these factors, and some others that you will find in this article, you should develop your sales in the markets in one way or another.

To help you develop a correct investment strategy, there will be no choice but to follow a series of action guidelines that will be very useful every time you plan to close operations. In addition, it will not cost you much to apply them, since they are enabled for all kinds of investors.

Some of them may be intuited, or even applied at some time in your life. But surely that others will be alien to your usual behavior, but that they can get you out of more than one trouble in your relationships with the equity markets. Even from certainly original approaches, and that you did not even know.

First key: adjust to the resistance

The first point of reference to execute sell orders is to close at the approach of some important level of resistance in the prices. Usually stop the uptrend of the affected securities, and that could even be the signal to undertake important corrections from these levels. However, if the resistance is overcome, the potential for revaluation is enormous. Although you should not risk excessively, and you should opt for applying sales to enjoy the capital gains achieved.

Likewise, supports are other levels of great importance for your investment. Not surprisingly, when they are violated, they will be the perfect excuse for you to close operations quickly. Unless you expose yourself to the losses accumulating in your investment portfolio permanently. Hence the importance for you to respect these levels presented by the prices, and based on them you formalize your sales in the equity markets.

Second key: in the face of liquidity needs

If your investment is generating profits, and for any circumstance, you need liquidity to face some personal expenses: debts to third parties, paying bills, or financing the next trip with your family, you should not let the occasion pass and sell your shares. You should not try to squeeze the most of the capital gains that may be generated, because any setback in the financial markets can ruin your profits on the stock market.

Third key: after large revaluations

In a scenario in which your shares have appreciated as a result of a prolonged uptrend, it will be one of the moments when you should stop to close the operations. Not in vain, you risk that stocks tend to correct their prices, even in a very marked way. To the point of limiting, or even canceling, part of your earnings. It is not worth it to continue with open positions in the stock markets.

Especially important are the overbought levels, which give very clear indications that in the next sessions sales will prevail over purchases. It is another of the scenarios that must involve you to finalize the operations, even temporarily. Even with the possibility that later you can buy back the shares, but with cheaper prices.

Fourth key: before any sign of weakness

Everything may go perfectly for you in the investment portfolio that you made a few years ago. But in the face of any weakness, either in the stock markets, or in the company of which you are a shareholder, it will serve to make you undo your shares as soon as possible. Not in vain, it may be the prelude to corrective movements of greater intensity.

One of the most useful strategies to check this status will reside in that the minimum in its price will be decreasing. All a sign that will imply that the change in trend has definitely settled on the value that you have taken positions. The best solution will start from the order you give to the bank to sell your participation.

Fifth key: acting without greed

Do not try to force gains in equities, and in this sense that old saying that is applied in a disciplined way in the stock markets can help you and that says that "The last euro will be taken by someone else". Good advice, which will undoubtedly help you on more than one occasion, and which the most experienced investors can attest to regarding its application and the benefits it generates for them.

It is preferable, on the other hand, do not rush in the bullish journey of a stock, rather than being trapped in the market. And is that this situation can lead you to make terrible sales, many of them with significant losses that will weigh down your personal assets. To avoid these cases, so common among retail investors, the most favorable strategy to defend your interests will be to apply a sell order that limits losses. It will be possible through the well-known stop loss, which will help you achieve your goals.

Sixth key: accept the mistakes made

It may be that in the end everything is as simple as you have made a mistake in choosing the securities that make up your investment portfolio. Or simply their quotes do not move as you had initially expected. In this case, you will have to admit the mistake and sell the shares directly, losing money in the operation. There will be no choice if you do not want your situation to become more unfavorable to your interests.

In addition, it will help you redirect your investment strategy towards other listed companies, which surely have better growth prospects in their prices. And with which to amortize the failure of your previous contact with the markets. Even, you can opt for securities with very high dividend yield, up to 8%. They will compensate the accumulated losses for the previous action.

Seventh key: adjust to the real price of the shares

One of the most objective parameters to sell your positions in equities will be that when the shares are close to their target price, it will be the moment when you will have to get rid of them. In this sense, the data provided by the brokers will help you develop the selling process. They rarely exceed their listing by more than 10%. It is not worth the risk when you reach these levels.

Another very different thing is that your investments are listed very far from these prices, with which the margins to continue in your positions will be more flexible. And with enough travel to obtain the desired goals from the beginning.

Eighth key: flee from unfavorable news

Faced with any news, or noteworthy event that affects the price of your shares, the quickest strategy to protect savings will be none other than to sell the shares. In these situations, which are also common in financial markets, it is not uncommon for the main intermediaries to make downward revisions to their target price.

Also the negative news about the evolution of the global economy they are transferred to the prices of the companies, which depreciate in a few trading sessions. Of course, you can remedy it, if before the appearance of the first signs of weakness in the markets, you finally decide to close all the positions that you have open at that time.

Ninth key: with symptoms of exhaustion

Many times the intuition of the investor himself is decisive to see how share prices will evolve over the next few weeks. Until they come to the conclusion that the value in question has little travel, or at least, that its appreciation potential has been exhausted. This is not the time to risk your buying positions.

The signs that show this situation, on the other hand, can be perfectly visualized through a graph. Showing, if necessary, to show how the general positions of the sellers are clearly imposed on the buyers. It will not be worth it to stay in the market, even if your positions are not really winners. From this perspective, technical analysis will be the best tool you have to detect these weakening signals.