A developing independent trader asked me: how can I better hold my trades to target? This trader wrote:
This isn’t a unique to me issue so wanted to know what the traders on your desk have been successful with to dial this in. Primary strength is move2move, but this leaves me sidelined for bigger trend trades and ideas unless I’m just hitting in and out which doesn’t feel optimal…
This may be as simple as just stay out of my own way and get comfortable being uncomfortable, using a core and leaving some to run and just use self talk to recognize why I’m being irrational, but as a new trader I wanted to ask since you’ve seen this before and curious what you’ve seen traders who are stronger move2move do to work through this. I’m dropping med school apps 2023 vs this year so I will have a little more time to trade (emphasis on little), and if I can gain traction I want to see how far I can push this but can not can not CAN NOT have this issue derailing my best ideas if I want to excel and have a shot at really growing my trading business. It may not be realistic that I can do this concurrently to prepping for apps, and that’s fine, but if I’m not doing my best to improve with the time I have why am I bothering?
8 Ideas to Help Traders Hold Their Winners
1. Find Solutions
“Weaknesses do not matter if you find solutions.” -Ray Dalio
I love how you are reaching out to find specific solutions. This is what the elite traders do.
2. Develop your trading PlayBook
Okay so now I am gonna get on you a bit. When I read questions like this my first thought is: this trader’s PlayBook is incomplete. There are trades to scalp. There are Trades2Hold. These are different trades. Trades to scalp that go higher are not trades that you should have held. Trades2Hold that do not reach target are not be scalped.
You need to define specifically which trades you will scalp.
You need to define specifically which trades you will hold.
And then in real-time you will not be confused. After the fact you will not regret. You will trade your system.
Now that doesn’t mean you will not measure and tweak your system along the way. And maybe past scalps will become Trades2Hold for you. But you will be trading your well-defined PlayBook.
See this video from Kyle V, from our desk, on how to PlayBook a trade: Flag Breakout Trade.
3. Write down your target
What follows is advice we often give to developing traders on the desk.
Write down your target (exit target) on a piece of paper, keep that piece of paper in front of you, and refer to it while in a Trade2Hold. This is an old school and super-effective technique to get you holding to target. This little piece of paper on your trading desk, in front of you, will remind you and help you to hold to target.
4. Practice holding a core to target
You do not have to solve this tomorrow. You can take your scalp for most of your position and then hold a small core to target. Measure your holds to target and see if you have success doing so. If so, then consistently add size and risk with these trades to target. Consider getting better holding. Don’t worry about being a market wizard instantly.
5. Visualize holding to target
Right now the only response you have built when holding a trade is to be anxious to cut it. You need to build another way for your brain to react in real-time. Visualization exercises can help. During these exercises, visualize holding to target to build this mental ability for your trading business.
See this post from Dr. Steenbarger, our trading coach at our prop firm, on visualization.
6. Tag and measure your trading results
Tag all of your trades and measure them in Tradervue. Tag for scalps trades. Tag for Trades2Hold. If during your monthly review, your trading statistics show that you have edge with your Trades2Hold, then you know to grow this part of your business. In real-time, you will be armed with your trading stats shooting confidence into your trading brain. You have earned the confidence to trade bigger with Trades2Hold. Your trading stats tell you so.
Justin uses stats, after tagging and measuring his trades, better than anyone at SMB Capital to drive his changes and performance:
How a Professional Trader Reviews his Trading Performance.
7. Start with the low hanging fruit
What A+ trades can you take tomorrow to start holding to target. Start with your best trades. Again, you don’t have to become expert tomorrow at holding to target. Show yourself you can with some trades. The easiest way to do this is with your best trades. Grow with them.
8. You are not specially screwed up
“Men who can both be right and sit tight are uncommon.” Jessie Livermore
Sorry but you are not the only one who has had to conquer this trading challenge. I say that because this ought to give you solace that there is nothing wrong with you. This is just something all traders have to work out as they are developing. So now this challenge is in your trading court. I hope knowing that makes it easier you to find your solutions to improve holding to target.
From all of us at SMB, train and trade well.
Mike Bellafiore is the Co-Founder of SMB Capital, a proprietary trading desk, and SMB Training, which provides trading education in stocks, options, and futures. Bella is the author of One Good Trade and The PlayBook. He welcomes your trading questions at [email protected].