Ken, Greetings...I hold trades for minutes, days, weeks, depending on a several of factors...here are two:
1. The Market! If the market is in a steady trend as I talked about in post #1 of this thread, then my holding time tends to be longer. If the market is very uncertain or sort of topping, like it has been for the last couple of weeks...then I have learned to take profits sooner, so my trade holding time is shorter. The problem during an uncertain market was I kept showing some profits on my positions and then wham, they would go back down below my buy point, as the market swung back and forth or went down. It is extremely frustrating to show a profit at first on a trade and then end up selling it for a loss.
2. My level of conviction, based on the reasons I have taken the stock position, and based on how I'm doing. If my conviction about the stock position is weak, I never should have placed the trade in the first place, so I will tend to sell conservatively and get out sooner. If I have been loosing money on my most recent trades, then I will again be conservative and get out sooner.
(If everything I touch seems to loose, then I will totally stop, turn off the computer and take a major time out. I read in a trading book about a firm that would limit the amount any one trader could loose in a day, a week, and in a month. If the trader hit that level, they were suspended from trading until the next month. This really works...it's like when a basketball team takes a time out because their opponents are on a scoring run, it forces a slow down in the negative momentum of the situation. I have come back from a self imposed one week break and found myself doing much better. This is very hard to do put it pays off over the long term which we need to keep in mind at all times. I do not need to make all my money from trading today, or this week, or even this month, so I can back off when things are not going well.)
;) RS |
