When to Sell Your Shares: Strategies for Maximizing Profits

By Jason McIntosh | Published 19 October 2023

They say that timing is everything. And this is especially true in the world of share trading. While knowing when to buy is important, having a strategy to sell your shares is essential (but many people overlook this key component of successful trading/investing).

This article explores the science of selling shares strategically. By the end, you’ll have a comprehensive guide making informed decisions, maximising your profits, and becoming a more confident trader.

Before you consider selling your shares, it’s crucial to have clear goals in mind. Without defined objectives, you might make impulsive and emotional decisions. This type of decision making often proves costly, but can be avoided with the right preparation.

Okay, let’s start with step one:

Setting Clear Goals

  1. Long-Term vs. Short-Term: Determine your investment horizon. Are you a long-term investor looking for steady growth, an active investor looking for gains over a year or two, or a short-term trader seeking quick gains?
  2. Profit Targets: Set realistic profit targets. How much return on investment (ROI) are you aiming for, and over what time frame? This can help you access risk vs potential reward.
  3. Risk Tolerance: Assess your risk tolerance. Are you comfortable with market fluctuations, or do you prefer a more conservative approach?

Key Indicators for Selling

Now, let’s dive into the specific indicators and signals that can guide your selling decisions:

  1. Technical Analysis: Use technical indicators like moving averages, relative strength, and chart patterns to spot potential exit points.
  2. Fundamental Analysis: Pay attention to fundamental factors like company financials, earnings reports, and industry trends. A decline in a company’s fundamentals may signal a sell.
  3. Market Sentiment: Monitor market sentiment and news. Overly bullish or bearish sentiment can be a contrarian indicator. Excessive optimism might suggest a market top, while excessive pessimism can indicate a potential buying opportunity.

Strategies for Selling

Different strategies work for different situations. Here are some common selling strategies to consider:

  1. Stop-Loss Orders: Implement stop-loss orders to limit potential losses. Determine a predetermined price at which you’ll sell if the stock moves against you.
  2. Trailing Stop Orders: Trailing stops allow you to follow an upward price trend while helping you protecting your profits. As the stock price rises, the trailing stop automatically adjusts, locking in gains. This can help you let profits run – a key factor in maximising profits.
  3. Scaling Out: Instead of selling all your shares at once, consider scaling out. Sell a portion of your holdings at different price points. This allows you to capture profits and benefit from potential future gains.

Emotional Discipline

Emotions can cloud judgment. To make rational selling decisions, it’s crucial to maintain emotional discipline:

  1. Avoid Herd Mentality: Don’t blindly follow the crowd. Just because others are selling doesn’t mean it’s the right decision for your portfolio.
  2. Keep Fear and Greed in Check: Fear of losing or greed for more profits can lead to impulsive selling or holding onto stocks for too long. Stick to your predetermined strategy.
  3. Have a trading plan. While you don’t know what the market will do next, a good plan will help ensure that you know what you’ll do in any situation.

Tax Implications

Selling shares can have tax consequences. Be aware of the tax implications and consider tax-efficient selling strategies.


Selling shares is a science and shouldn’t rely on guesswork, gutfeel, or fear. It requires a clear strategy, discipline, and a keen understanding of market indicators. By setting clear goals, recognising key selling indicators, and implementing effective selling strategies, you can maximise your profits and navigate the complexities of share trading with confidence. Remember, successful share trading isn’t just about knowing when to buy; it’s equally about knowing when to sell!

Jason McIntosh | Founder, Motion Trader

Jason McIntosh | Founder, Motion Trader

Jason’s professional trading career began over 3 decades ago. He’s a founder of two stock advisor firms, a listed funds management business, and has helped thousands of investors navigate the stock market. Click here to read Jason’s incredible story of, at age 20, sitting alongside some of the world’s greatest traders (and the life changing experience that came with that).

Meet Jason

I'm Jason McIntosh, the creator of Motion Trader. My career began in 1991 on the trading floor at Bankers Trust. Nowadays, I trade my own systems from home in Sydney. 
Motion Trader is for investors who value robust analysis, data driven entry and exit signals, commentary, and education. I use engineered algorithms to identify when to buy and sell ASX stocks. No biases or guesswork, just data driven signals.