Hold Time Analysis: Are You Cutting Winners Too Early?

One of the most common trading mistakes is cutting winners short while letting losers run. Hold time analysis provides objective data to identify and correct this tendency.

The Hold Time Problem

Consider two traders with identical win rates:

Trader B will dramatically outperform Trader A, even with the same win rate. This is the essence of "letting winners run."

Key Hold Time Metrics

Average Hold Time by Outcome

Compare your average hold time for:

Hold Time Distribution

A histogram of your hold times reveals patterns. Do you cluster around specific times? Are there outliers that indicate good or bad behaviors?

Time-Based P&L Curve

Plot your P&L across time held. Where does the curve flatten or decline? This shows your optimal exit timing.

Common Patterns and Fixes

Pattern: Quick exits on winners, slow exits on losers Fix: Use time-based trailing stops. If a trade is profitable after 30 minutes, you must hold at least another 30 minutes.

Pattern: Consistent early exits Fix: Scale out. Take 50% at your first target, let 50% run to a larger target.

Pattern: Random hold times Fix: Define time-based rules in your trading plan. "I will hold momentum trades for minimum 45 minutes unless stopped out."

Using Practice—Process

The Hold Time Analysis dashboard shows all these metrics visually. Set up alerts when your hold time patterns deviate from your plan, and track improvement over time.