Why do you think you should hold trades longer? Imagine in any closed system with a stop loss and no target then there are infinitely many paths that will hit your stop loss and no path that will hit your profit target. What's the end result of trading that system? 100% losses guaranteed.
Your holding length should be based on your basis for entering the trade and the type of trade it is. If your basis is fundamental data you will probably hold a longer period of time because information on that time scale is slower. If your basis is technical analysis you will probably swing trade because you are probably using daily bars and your information rate is on that time scale.
Common problems with not being able to hold a trade are:
1. You didn't define your basis for entering the trade well.
2. You are positioned sized too large.
3. You are trying to do too much with too little. In other words, you're overtrading. This is often due to an impedance mismatch because you're not acting on the natural wavelength of information in your frequency spectrum. An example would be entering a trade for a long term trend and then exiting as soon as it goes a little in your favor. You took an action even though no new information came out that should change your hypothesis (because in this example your hypothesis is based on some fundamental situation).
4. Cognitive errors. You've made some form of cognitive error. You need to examine your assumptions carefully. This one can trip up even experienced traders.
The ability to trade on order flow is a learned skill that requires deep study. Of course, there are generals one can give but there always exceptions. So, it is something you should study as part of your craft just like you should study technical analysis if you use that.
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"Fight the urge to take profits" We have all been there. I am not an order flow trader I am a S/R guy. But in either case you need a fairly rigid rule for getting out just like you have for getting in. I draw a trend line (possibly on a lower TF) and exit when a full body candle closes and violates the trendline. This indicates that market structure is changing as opposed to just a retracement.
Closing trades prematurely is often a symptom of fearful trading. If so you need to reduce the amount you risk on each trade by trading smaller until you are comfortable letting the trade run.
Otherwise the market action should be your guide for when to take profits keeping in mind your trading method and personal style. Do not take the common advice to "let your winners run" too seriously that will lead to a lot of lost profitable trades. There is nothing wrong with taking profits as long as they are greater than your losses.
Last edited by Seahn; January 20th, 2017 at 12:52 AM.
I'm a scalper but I do have a strategy that I use in Forex where I just close the platform, walk away and check back in a few hours. This is a strategy that I use off the daily charts going for 30-100+ pips. I've never tried it with futures because I mostly just scalp in the futures market. The above strategy is actually one of my most profitable strategies. It doesn't trade that much because it is based off of daily bar continuation so many times in the morning when scanning all the pairs you won't find any trades and you aren't really drawn into any plays.
So a hands off, trust your stop, trust your TP and go away and do something else are my keys.
When I traded the spot forex markets I used something similar. I traded 4 hour bars. Placed a trade walked away then checked again in 4 hours. It kept me from getting anxious and getting out for no reason. I did not use a TP order however. I have just never found a way to predict haw far the markets will go. Hence my post above on exits. Walking away should help a little.
I had an issue of impatience with taking profits as well.
At the end of the month when I review my journal, there's a real P&L cost to it.
I then began researching on how to be patience and it's more of self-work and journal daily on this behaviour. This brings the impatience to the surface at the conscious level, then you will be more aware of this urge, what does it feel like? where's in your body?
Never compress this emotion, just accept it's there.
For me, it took about 2 weeks to recognise and change it. The intensity of the urge to take profit eventually will be less as you practise to accept its there.
you can google - Sedona method, it's another way to do feeling release exercises, if you have time.
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Trade smaller. Trade at a size that you don't care. Then it doesn't matter how long you trade. I started swing trading M6E on a weekly basis. Having such small margin and tick size I was able to hold trades for days or weeks at a time.
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