How Long Should You Hold a Trade?
Many traders fail due to not knowing when to hold ’em or fold’em.
Not knowing how long to hold a trade or when to get out.
We believe Kenny Rodgers had some sort of experience in playing poker.
If you haven’t heard Kenny Rogers’s song, The Gambler, you should check it out. It’s a really fun song.
Trading and Investing can be fun too!
However, only if learned correctly.
Many of us suffer from the stress of trading and it’s usually due to risking an uncomfortable amount of our hard-earned money.
On the other side of the spectrum, there are traders who don’t trade their maximum amount. Usually out of fear.
Either way, these are problems that we may overcome with the right mindset, education, and willingness to execute with courage.
One of the biggest challenges we face as traders is usually programmed into us at a very young age.
That is the program of always wanting to be right.
It would have been very useful if we were taught from an earlier age how to look at the probabilities of possible outcomes of an endeavor.
This would prepare us by developing mental skills that allow us to make decisions in the face of uncertainty of outcome.
However, many of us don’t learn about statistics until college.
Even then, we really don’t think about probabilities in college unless we have a stats exam.
When we take probabilities into consideration for anything in business, the emotion or EGO remains silent in the calculation.
Which is a superpower in trading.
This helps us to be unbiased when looking at trading opportunities. This helps us to know when to hold ’em and when to fold’em.
This is a chart of the EURUSD.
The plan is to buy at the Demand Zone, 1.06281-1.05956.
We will have two exits, which, are a Stop and a Target.
As we formulate a trade plan, we must make it as simple as possible.
In our EURUSD example, we know exactly when to “Fold’em and “Hold’em”.
The simple trade plan analysis above tells us to Fold’em at 1.05736 and to Hold’em until 1.07281.
We can see that if we want to exit our trade before the next supply zone which is 1.07513 – 1.07696, our exit is just below.
Of course, our entry is 1.06281.
One more simple step is that we need to know is how much are we able to invest in this trade?
There are different trading accounts for forex.
There is the micro, mini, and of course standard.
The micro and mini accounts are for beginners.
The standard account is for seasoned traders who understand and have a consistent trade plan.
The most important part of trading is to keep it simple.
Are we able to withstand a loss of 1% in our account after 1 trade?
The goal of trading is to consistently Hold’em for profits and Fold’em when we’re incorrect.
Also, trading is a business that we can Fold’em more times than Hold’em and still be profitable.
Let’s look at the below tables.
Traders need to know that we don’t have to be successful 60% of the time.
Maybe there would be more successful traders if they knew and could see what trading actually is.
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