How long to stay with a winning trade

Discussion in 'Risk Management' started by oraclewizard77, Nov 10, 2008.

  1. oraclewizard77

    oraclewizard77 Moderator

    Let's say I put some of my capital to long shot stocks for example those waiting FDA approval.

    Let's say one of them gets approval and the stock goes up.

    How long do these stocks usually stay with a long term upward trend, or is it just better to hold them for a few years after the event happens to see if they get bought out and/or continue to make huge revenues leading to an even higher price than the 1st breakout price?
  2. If it's a long term view you have, you won't be looking at getting out. Other than that, I'd be looking at previous weekly support/resistance levels.

  3. ==================
    Haven't studied that sector lately;
    but have in the past, its a roller coaster more than most sectors.

    As far as long term trends,personaly consider 1 year long term;
    if funds are in that stock[usually are in it, if it's any good];
    [market is bearish year to date]bears tend to kill most [not all] uptrends.

    So funds needing cash for redemptions cause selling in excellant stocks.......

    Some overnite gaps do occasionaly go against trend traders;
    but my plan calls for never letting a profit turn into a loss.:cool:
  4. Personally, I think this is a very important question and one you should have answered before trading. First you need to determine what you are, are you a trader or an investor? They're very different from each other.
  5. kxvid


    Yes I wouldn't consider a stock you own for years a 'trade'. I guess the answer to your question would be as long as you feel conformable and believe you stock has worthwhile upside.
  6. wst


    If one trades multi month trends a trailing stop is the most suitable I would say.

    As investment vs trading I would divide them at 1 year period. If its the position runs for 12 months or less its trading/speculation and more than 1 year it's investing. But it's pretty much fluid, if you for example went short the market in bear funds last year i would still classify it as trading even if holding period is 1.5 year.