Why you should never HOLD a boring trade - Rule I followGet in and get out in the shortest time possible.
This is the science of successful trading.
But what happens when a trade turns out to be more like a non-performing investment?
When you hold a long-term trade, there are a few issues that will follow including the:
Opportunity cost
You can find other higher probability trades, instead of having your money tied up aimlessly in a sluggish market.
Unnecessary impatience
You’ll eventually feel rather anxious and frustrated holding onto a long-term trade, when you are better off trading in a market that is moving.
The fake-out
With an ongoing trade, the breakout pattern may fizzle out into a low probability fake-out trade (a trade that turns against you).
I created a rule to avoid this situation from ever occurring again.
I call it a time stop loss...
After 7 weeks of holding a trade, exit the trade and look for a better opportunity.
Worst case you take a smaller loss than you thought.
Best case you take a smaller profit than you expected.
But you'll stop holding trades that aren't performing and stop paying daily costs with trading....
Sound good?
Trade well, live free.
Timon
MATI Trader
