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Hello all,
How important is it to hold and manage the trade for maximum profit in an effort to keep winners greater than losers?
In my trading, I like to wait for a trend and enter on Pull Back for a Entry and Exit of reward to risk of 1 per trade and aim at win rate of +50%. I just think holding for those big winners is too taxing mental and lots of work to manage the trade for higher winners and dealing with those back to back consecutive losses.
Am I the only one having an issue manage winners for bigger profits?
Thanks
Hello Michael,
Here's the last trading day... Friday. This is how I traded it...
2 swings. Totally different situations. Same result.
The only difference was the risk and emotional discomfort in the second trade.
You could say it was stupid to hold. BUT ... it was a conscious decision I made publicly to hold as I was still bullish.
I was pretty alone in my view and it could have just as easily turned and hit my stop.
But I made my decision. Stated it publicly and stuck to it!
The day before I was WAY more defensive...
Still and always looking to catch swings!!!... but in this action I got out of positions alot faster and was willing to repeatedly jump back in.
Bullish all day here too! Same bias, different style, same result. Good!
So my answer to your question would be you ARE looking to hold on to those winners.
You just need to have a higher average win/loss ratio NOT only win rate! In fact I think win/loss ratio is far more important.
But it matters not if you have small wins or small losses as long as you avoid those large outlier losses.
Small wins + big wins + small losses = profit.
Small wins + small losses + big losses = loss.
Those last two lines are trading in a nutshell.
Just my opinion but hopefully theres a tidbit in there.
Good trading too you!
Hi Michael,
I think a big part of deciding on how long to hold has to do with your window of trading. I only trade the open for the first 90 mins. I have learned that I cannot hold through large PBs because I do not have time to wait for the trend to resume. Because of this time crunch, I get uneasy about profits going away because I don't know when the next move is going to be - even if the market cycle leads to a high probability the market will continue to move in my direction.
One important perspective for traders to have is to understand you do not have to milk the market for every dollar. Is your strategy and execution logical? Does the math make sense? If so, take your profits for the day and limit your loses and you will make money. The more you sit in front of the screen, the more comfortable price action reading becomes in the moment. Until then, it is ok to take profits quickly if they are larger than actual risk.
I agree with SandPaddict that the easiest way to make the trader's equation work in your favor is limiting losses. I prefer tighter stops because of this and daily loss limits.
Good hunting!
