One of the hardest things to do in trading but one of the most important is holding onto winning trades. In order to mathematically be a profitable trader big winning trades must overwhelm small losing trades. Minimizing losing trades is the most important aspect of trading but a close second is maximizing winning trades.
From a Stage Analysis perspective, this takes the form of holding onto trades once they break out of a Stage 1 base and move into a Stage 2 advance. As long as the trade trends above the 30-week moving average the most important thing to do is hold on and let the trade grow.
Now one thing that I do believe in is taking partial profits along the way to add liquidity to your account. Without a cash position in your account you can’t take advantage of future trading opportunities, and the only way to increase cash is to take some profits. I like to sell when a market is stretched above the 30-week moving average and take some chips off the table.
Here’s some of the things Jesse Livermore said about sitting tight in big trades:
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