Average holding time for winning trades

[daniel_m]

Originally posted by JORGE
I have asked myself this question many times and have decided it has more to do with my emotional state and market conditions than anything else.

No shit. What ELSE is it gonna have to do with BUT your emotional state and market conditions?

 

[daniel_m]

Originally posted by Don Bright


Plot out each trade, in at zero of course, and out with a profit or loss.....but then plot where the stock went (still up or down) before it reverses itself a dime or so. This will help you visualize if you're holding on the right amount of time.

How much profit you make on a trade, on average, is always going to be a function of how much you were willing to risk in the first place, and how much "room" you were prepared to give the position to retrace. It also depends on the general time frame you trade in.

Don doesn't believe in holding periods of beyond one day - hell, I don't think he believes in holding periods of more than two minutes - but somebody that trades in terms of days and weeks will probably allow different levels of retracement than someone that trades in seconds and minutes.

Don, you are saying that you will allow a position to move against you 10cents before you exit? Is that independant of how far the position has moved in your favor and other present factors? For example, if you are up 50, the spoos are rallying, would you let your position go 15 or 20 against you? I would (and do).

 

[trader99]

Originally posted by LelandC
Thanks for the many thoughtful replies to the question I posed of holding onto winners longer.

I just need to learn that once I am positive on a position that stock is working for me. Trades take time to pan out. Stocks don't go straight up or down (usually). There is no harm in making obscene amounts of money for sitting on your hands (literally) while your stock is doing all the work!!!

Leland

Here's a quote from Edwin Lefevre's Rem. of a Stock Operator:

"It was never my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight! It's not trick at all to be right on the market."

Maybe that's the deepest truth in daytrading, but it's so hard to practice. hehe.

-99

 

[JORGE]

Originally posted by daniel_m


No shit. What ELSE is it gonna have to do with BUT your emotional state and market conditions?

Do you even bother to read the posts or just enough so you can come back with one of your witty and always insightful replies.
I do not have any definitive system for trading and rely mostly on simple charts and what I have observed from watching a quote screen for the last seven years. The point of my post was on a day when markets are moving fast I often bail out of my winners too quick, because of a fear that things will turn against me. When I review my trades at the end of the day I realize the reasons for my quick exits had nothing to do with where a stock was going, but on the fear of what could happen to hurt me. Solutions would be to trade smaller, focus on only one or two issues, or sit out completely.

As far as what everyone else uses to determine exit points it seems most people have some sort of defined system that allows them to maximize their winners. I am sure this works great for most traders, but I rely on watching the speed at witch an advance or decline seems to be running out of steam. This method obviously works better for me when the market is slower.