Recently, I was reviewing some basic stock trading strategies, and I was surprised at how little many traders understand about when is the right time to exit a position. Most think you can buy or sell a listed stock at any moment, but the reality is more complex.

First, you have two main options: buy stocks directly (where you actually own the asset) or use CFDs where you speculate on the price movement without owning anything. The difference is important because if you want to sell physical shares, you need to own them first. With CFDs, it's different—you can sell without owning, but it all depends on the broker.

Now, here’s the important part: you cannot buy or sell a listed stock outside of market hours. Each exchange has its sessions (London, New York, Sydney, Tokyo), and if you want to trade Mercedes-Benz shares listed in Europe, you need to wait for that market to open. European hours are roughly from 3:00 am to 11:00 am New York time. Outside of that, forget about trading. And obviously, weekends are closed.

The million-dollar question: when to sell? This is where analysis comes in. Let’s look at Twitter’s case in late 2021. The asset rose from $48 to $71, then dropped but stayed above $64. Later, it hit $72, but the next low was lower than before. That’s a signal. The next high was lower than the previous one. Boom. Trend reversal. When you see that the highs are getting lower and the lows too, it’s time to consider selling. The 50 and 100 EMA cross downward confirmed what we saw. All those confluences indicated entering a short position around $67 in October. By December, it was at $40.

Another interesting example is Netflix. This case is different because fundamental analysis is key here. The company was rising until 2021, but something changed. In 2019 and 2020, they grew strongly (19.96% and 21.90% respectively, thanks to lockdowns). But in 2021, they only added 8.74% new users. And in 2022, they not only stopped growing but lost 2.2 million subscribers. Reasons? Increasing prices and fierce competition from Disney+, HBO Max, Amazon Prime. When you combine this with technical analysis (EMA cross in January 2022), you had a clear opportunity to sell Netflix shares above $520. Now they’re trading much lower.

The lesson here is that you can’t just buy or sell a listed stock without understanding what’s happening. You need confluences, technical signals, news, fundamental data. Tesla is another similar case: it was the boom of electric cars, but now fierce competition is arriving, and prices are adjusting.

Regarding the technical process, selling on a platform is quite straightforward. Find the stock, click Sell, and you have options: sell at the current price or use a limit order to sell when it reaches a certain price. Simple.

Now, some hard-earned tips: first, control your emotions. Many traders fail because they get nervous when they see red numbers. You need real discipline, not just in a demo account. Admit your losses and move on. Don’t check your position every minute—let it work.

Second, always use a Stop Loss. If you buy Google stock at $2,220, set your Stop Loss at $2,120. If it drops to that price, close and lose $100, but limit the damage. Leverage is another factor: with 1x, you need to have all the capital, but with 10x, you only need 10%. This changes how much margin you need to maintain.

And finally: before buying or selling a listed stock in any market, do your research. Understand what the company does, how its finances are, who the competitors are. Check the economic calendar to know what news might impact the market. All this together gives you the best odds. It’s not an exact science, but it’s much better than just guessing.