Know When To Hold Them

StatsEdgeTrading

This was a busy week for StatsEdgePro members, with numerous trades. Some small wins, some minor losses, and some rippers, like KOD, making over 60% in one week

This led to a few questions from users about holding some trades past where the system tells us to exit. We have optimized our swings for around a one-week hold, but what if we really think we got something? I am going to use KOD and BZAI for examples for when I want to hold long and when I want to move on.

There are two reasons we want to turn over accounts so often. The first benefit is that by turning over our account, we can see our edge faster. What I mean by this is that if you have a 51% edge in your trading strategy, you're not gonna see that in three trades, you won't see that in seven trades. You need to look to see that in 100 trades, so the more trades we make, the faster we see that edge.

The second reason is that the more we turn over our account, the more we can distribute the money we hopefully made from our winners into larger trades. Let's take KOD, for example. A trade like that grows our account, which means that next week, when it’s time for more Trading, we will have a larger account and therefore be able to take on all our new trades at a bigger level.

However, that is not the reason I'm going to sell KOD on Monday, as I'm supposed to, because it's simply running so much so fast that I think it needs to cool off.

One stock I will potentially hold past the Monday close is BZAI, as pictured below.

Coming from a pullback strategy, we bought BZAI at the purple line, and the stock experienced a nice bounce for the remainder of the week. If you look at the chart, you can see that this is recovering from a significant sell-off in a popular space, such as AI, with room to move higher if the good news that caused the initial gap continues to be priced into the stock.

Because of the potential of getting a nice pullback in an uptrend, I can confidently sell part of my position on Monday, placing a stop below that swing low. Regardless of what happens to the trade, it will be a winner. This gives me the confidence to hold on.

As soon as I do this, I know I'm deviating from the strategy, so I just need to ask myself: if I make way less money than I would have by following the plan on this trade, is it worth the potential I'm seeing in the chart for much higher prices?

Ultimately, that is up to the traitor, but how to deal with winners and how to get the most out of our winning trades is undoubtedly a good problem to have.

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