When to sell: For some investors, the hardest part is letting go

Last in a four-part series on active trading your expected returns. By contemplating a stop price — the predetermined point at which you’ve decided to sell — you can better determine the maximum risk you want to take on the trade, which can help you determine how many shares you should purchase and at what price.”

Online platforms offered by TD Direct Investing present investors with a host of tools that automatically execute orders based on predetermined parameters, such as how much profit an investor expects to take and how much they’re willing to lose.

Conditional order features built into the trading platform allow even complex orders to be executed automatically and with precision.

Once investors have determined their appropriate exit price points, they can put on a one-cancels-other order, also known as a bracket order, that stipulates that if one of the orders is executed, the other one will automatically be cancelled. For example, an order could be placed to automatically sell a stock at either a high target price to take profits, or at a low target price to mitigate risk, whichever price is reached first. The order can be combined with a good-’til-cancelled instruction to ensure the order remains active until the trade is either cancelled or executed.

“Alternatively, you can leverage a trailing stop order that automatically adjusts your target exit price as the market price fluctuates,” says Tanev. “That allows you to remain invested in the stocks that are trending up and only exit when the trend ends. When your trailing stop is triggered, your position is automatically closed, so you can move on and deploy your valuable assets elsewhere.”

TD Direct Investing offers a wealth of seminars, webinars and live online master classes to help investors sharpen their skills around determining when it makes the most sense to sell to achieve their investment goals.

“Saying goodbye to your positions isn’t always easy,” says Tanev. “But thorough knowledge, experience and planning are the best weapons we have against emotionally-charged investment decisions.”

Visit the Managing Wealth channel online at FinancialPost.com for more insights into long-term investing strategies.