Average holding time for winning trades

L

LelandC

Has anyone here taken a look at their average holding time for their winning trades? I have trouble holding onto my winners long enough. When I look at my trades one critical aspect that I'm missing is increasing my holding time for my winners. I do a great job of cutting the losers but I also do a great job of cutting my winners:(

Just this morning for instance I was only in a winning trade for around 10 minutes. I promptly took my .50 profit but something told me it had more to go. My target on the trade was $1.00
The trade did cross the $1.00 profit threshold too. It is just so frustrating. This is the one element of my trading that is holding me back from huge success....

Any insights?

Leland
 
This is an emotional conundrum for some. Seen it a million times.
My advice has always been that if you are not comfortable holding positions until there is a compelling reason to exit, and I know this is very hard for a lot of traders (particularly newer traders who tend to be more tentative); exit your trade as you would while still keeping a small part of the trade open so you get used to longer holding times.
This is not intended to promote legging out. That is a whole different issue. But if you are trading for example, 1000 shares (or less, or more), get out of 900 and hold 100. This will not dramatically affect your overall profit, and MAY help you to develop a comfort level with longer holds.
You can do the same with smaller positions, however, I do realize if you are starting with 200 shares, then you will be holding 50% instead of 10%. ....do what you have to. I don't know if odd lots are a realistic way to do this. Not familiar with how commissions work with odd lots. But even that may work.
Most important thing to me has always been to have a GOOD REASON to exit a trade. Just as you should to enter. It just seems easier for people to exit a winning trade without any compelling reasons.
This is my style, and not necessarily the right thing for everyone. It is a matter of conviction, discipline, and comfort. But it can be worked on. Some traders have to scalp quickly. I understand that everyone has to be comfortable with their style. But this "legging out" exercise may work for you. It has worked for many.
I know I have said all this before....excuse the repetition (if it applies to you).

Good Luck,
RS7
 
Originally posted by LelandC
Has anyone here taken a look at their average holding time for their winning trades?


I don't think "average holding time" is really the statistic you're
looking for.

Probably, the question you should ask is:"Has anyone here
taken a look at their "profit/loss ratio" for their winning trades?



Just this morning for instance I was only in a winning trade for around 10 minutes. I promptly took my .50 profit but something told me it had more to go. My target on the trade was $1.00
The trade did cross the $1.00 profit threshold too. It is just so frustrating. This is the one element of my trading that is holding me back from huge success....

Any insights?

Leland
More...


For example, you said you had a $1.00 target for this trade.
How much was your initial risk? You should strive for at least
a 3-1 profit.

If your initial risk was .10, you made an excellent trade.

If your initial risk was .17, you made a good trade.

If your initial risk was .50 or more, you made a bad trade.

Try to shoot for a 3-1 ratio on your trades...a 2-1 minimum.

Hope this helps
 
Leland have you ever looked inside, I mean deep inside, and try to put your finger on what perpetuates this folly???

If so what conclusions have you made???

PEACE and goodtrading,
Publias
 
I am currently trying to look deep down inside and put a finger on why I let go of good trades too soon. Haven't been able to pinpoint it yet. Maybe it's fear of great success? I know that sounds strange but maybe its true...

Leland
 
Leland,

Do you think it may be perhaps that you are too attached to the "fruits" of your actions???



PEACE and good trading,
Publias
 
Originally posted by Breakout



For example, you said you had a $1.00 target for this trade.
How much was your initial risk? You should strive for at least
a 3-1 profit.

If your initial risk was .10, you made an excellent trade.

If your initial risk was .17, you made a good trade.

If your initial risk was .50 or more, you made a bad trade.

Try to shoot for a 3-1 ratio on your trades...a 2-1 minimum.

Hope this helps
More...
Good in theory, but I disagree in practice.
I think sometimes you need to give yourself (and your trade) a little room. No one has perfect timing. If I were down 10 cents in a trade, I would ask myself if I was wrong, and the stock was weakening (based on the group, the market, futures, whatever), or if maybe my timing was just off a bit. Sometimes a strong stock can get a bit "tired". This is different than getting "weak".

As far as upside profit targets....I don't really believe in them. After all, there is unlimited potential on longs, and even shorts can conceivably go to zero. Without a reason for an exit, you only limit yourself. However, you cannot let a winner disappear. Someone said just yesterday here that you can treat winners with a "trailing stop" mentality. Promise yourself not to let X% of the gain go away. This makes a lot of sense.

Good luck, and try and "hold on tightly" as Publias would say!

:) RS7
 
Originally posted by Publias
Leland,

Do you think it may be perhaps that you are too attached to the "fruits" of your actions???



PEACE and good trading,
Publias
More...


something to really consider...thanks for pointing it out....any suggestions on how to work on this???
 
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