Selling stocks is as important as knowing how to buy them. To do it right, you need to understand when the time is right, what steps to take, and how to protect your money during the process. In this guide we explain step by step how to sell and buy shares, with clear examples and advice so you can make decisions with confidence, even if you’re just starting out.
How to sell and buy shares?
Buying and selling stocks, even on the same day, is easy. You just need to follow these steps.
1. Find your broker
Shares are bought and sold on a financial market (a stock exchange). But to access this market it is necessary to use the services of an authorized intermediary.
For this reason, the first step to selling or buying shares is to select a broker and use his services to access the market.
There are two types of brokers: traditional ones (generally associated with banks, with greater personalized attention and higher commissions), and online brokers, which offer more agile and economical platforms, ideal for operating from home and in complete autonomy. Both have their advantages, but many students opt for a simple, regulated online broker to get started.
Also, make sure the broker gives you access secondary marketsnot only at initial issues (primary market), since the daily trading of shares always takes place on the secondary market.
For example, imagine that Marta wants to sell some shares purchased months ago. Since your bank only allows you to invest in funds and initial issues, you decide to open an account with a regulated online broker, where you can operate on secondary markets such as the Spanish or American one, quickly and with lower commissions.
In fact, one of the most frequently asked questions is: can I buy and sell shares whenever I want? The answer is yes, as long as the market in which those shares are bought and sold is open. Each stock exchange has its own trading hours.
To choose a broker, it is important to note that it is under the supervision of the regulatory body of the country in which it is based (in Spain it is the National Securities Market Commission).
Then it’s just a matter of opening an account and depositing the necessary capital. If you already own shares and what you want to do is sell them, you will have already done this step previously, since the shares are deposited in your securities account.
2. Select actions
Whether you want to sell or buy shares, you must be clear about what values are involved in the operation. To do this you need to have some knowledge of how listed securities are analysed.
It is assumed that if you buy shares it is because your analysis indicates a good opportunity. And if you decide to sell, it could be due to several reasons, as summarized here:
| Sale with benefits | Sale at a loss | Change of strategy |
|---|---|---|
| The price has increased and you want to profit. | The value has dropped and you prefer to limit your losses. | You readjust your portfolio and the stocks no longer adjust. |
Now, we don’t always decide based on analysis. Sometimes we sell out of fear or impatience. It is important to distinguish whether your decision responds to emotions or a technical reading of the market. Panic selling is rarely profitable. Learn to detect that impulse and counter it with your strategy.
3. Decide on the amount you want to buy or sell
Just as important as choosing stocks well is determining how many to buy or sell, especially if you are trading intraday.
Your capital must be well managed. As a general rule, Don’t sell more than 20-25% of your portfolio unless you have a clear, technical reason to do so. Selling without criteria can unbalance your overall strategy.
Also, before doing anything, define your file maximum acceptable loss: How much are you willing to lose if the trade goes wrong? This figure should be clear and based on your risk profile, not impulses.
A good starting point is The 2% Rule by Alexander Elder. It consists of not risking more than 2% of your total capital in a single operation. Therefore, if your account has €10,000, the maximum risk would be €200. This reference allows you to limit losses and operate with greater serenity, even in moments of stress.
4. Start the buy or sell order
The last step to sell or buy shares is place the order with the broker and will take care of its execution on the market.
In the order you basically have to indicate whether you want to buy or sell, the shares and the amount. But you can also determine at what price you want to buy or sell them.
There are different types of orders, each with a different function:
- Order at the market: executes the purchase or sale at the current market price. It’s fast, but doesn’t always offer the best price.
- Limited order: You set the price. It is executed only if the market recovers or improves.
- stop loss order– Establish a minimum selling price to limit losses. It is activated automatically if the price drops too much.
In case of sale, the stop loss not only prevents lossesit also protects profits already made in the event of a price drop. Think of it as a seat belt in your trading.
Whether you’re just starting out or already trading in the stock market, this stock market course is an excellent opportunity to strengthen your knowledge and improve your investment decisions.
When is the right time to sell stocks?
Selling stocks can be a strategic decision, not just an emotional reaction. Here are four common situations where selling makes sense:
- You have reached your profit goal and you want to secure those profits.
- You detect a trend change through technical or fundamental analysis.
- You need liquidityfor example, to deal with an unexpected expense.
- Rebalance your portfolioadjusting the weights based on your long-term strategy.
The key is to decide based on analysis, not fear.
