For Profit or for Loss: 4 Tips for Selling ASX Shares

By: Submissions

Selling a share on the stock market is as important and intricate as buying one, especially in the Australian market. It's challenging to let go of a profitable asset, and it's impossible to predict when stock prices rise or decline. Many beginners of the industry may regret selling their shares right before they grow, missing out on massive gains, while others may hold on to them for too long, expecting that a declining stock would recover.

The Australian Securities Exchange (ASX) currently lists approximately 2,000 firms, each with data on share prices and predicted growth or decrease. Shareholders gain or lose money based on how well a firm performs gradually; therefore, it shouldn't be underestimated. While perfectly planning your trades is impossible, many share-selling tips allow you to make wiser decisions. Selling your shares on the ASX? Here are four tips for selling ASX shares, whether for profit or loss:

1. Determine Whether You're a Trader or an Investor

To start, evaluate your trading or investing timeframe, which specifies the average period you want to keep your shares. Do you want to be a trader or an investor? Both groups purchase and sell shares, but they have different approaches to achieving success in terms of profitability.

Trading stocks or shares in a short period to generate immediate profits is what trading entails. On the other hand, investing is quite the opposite. For example, traders think in terms of weeks, days, or even minutes, whereas investors think in terms of years.

Trading may be a fun way of making quick money, but much like gambling, it may quickly lead to significant losses. In contrast, investing often results in lesser short-term gains but also fewer catastrophic losses. When you sell shares on ASX, ensure that your stock selling time frame is part of your entire plan. This can help signify whether you're selling for profit or loss. 

 

2. Know the Two Types of Sell Orders

The most basic approach to selling a stock is by what is known as a sell order. Once you've decided to place a sell order, you must pick what form of sell order you want to make. The ASX Trading Platform offers two order types: Limit and Market-to-Limit, discussed in more detail below. Each order type has a different time validity and execution charge. Both order types are accessible on the Trading Platform for all assets.

• Limit – These orders specify a minimum permitted price, and the stocks will only be sold if a buyer's bid matches that price (or goes higher). The advantage is that a seller has a better guarantee of the price they'll receive. The disadvantage is that your order may be lost in an extensive list of pending orders.
  
  
• Market-To-Limit – A combination of market and limit orders. A market-to-limit order is a request to purchase or sell assets at the best current price, similar to a market order. If the whole demand cannot be satisfied, the remaining portion is re-submitted as a limit order.
  
  The cost of the limit order is set to the same as the price of the market section. However, its order function is a market order first. This implies you won't be able to place your order outside of market hours.

The order types for selling stocks in ASX are simple and consistent with how the market operates. 

3. Keep an Eye Out for Media Trends

If a stock you hold becomes the subject of media attention in the ASX, it could be time to consider selling. Stock-feeding trends draw many participants to the market, including newcomers, seasoned speculators, and those trying to make instant money. A stock price increase is usually the outcome of impulsive buying at a faster rate, but they can collapse when prices get too high to attract sharks. The buzz fades, prices fall, and you're left with a poor return on your initial investment.

4. Sell When the Company's Performance Changes

When a company's finances deteriorate, investors may be forced to sell the shares. If a company's quarterly earnings have been gradually declining or doing poorly relative to its industry rivals, for example, investors may begin to unwind their holdings.

Keeping track of a company's finances is one of the simplest methods to stay informed about its status. Investors who wait for external sources to update them on stock news often cause the market to lag behind measures of financial information, so don't be one of them. If you see unusual patterns of revenue decrease, rising debt, or anything else that might negatively influence the company's price, it may be time to sell.

Final Thoughts

Although there is no foolproof plan for beating the market, stock-selling methods can help you succeed in your transactions. When you find yourself selling your shares in ASX, remember to follow these tips.

By Kelly Reed

© 2021 Copyright Kelly Reed - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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