Why Most Traders Exit Too Early – And How YOU Can Hold Longer

Introduction

Imagine this: You wait for your perfect setup to form, your indicators light up in perfect confluence, and you enter the trade with full conviction. The market moves as you envisioned, giving a good 10-point move, till your mind whispers, “That’s enough”. 

You exit in happiness, only to stare in disbelief as your 10-pointer shoots up to the stratosphere, without you.

If this sounds familiar, you’re not alone. Most traders face this exact hurdle. Let’s take a look at why we exit too early and how to build the mental strength to hold longer.

The psychology behind exiting too early

The reason is simple: fear. 

What sort of fear? It’s the fear of losing what you’ve already made. It’s the fear of giving back your unrealized profits. 

Our brains, despite all modern advancements, still run with the same wiring that assured survival eons ago. It equates the fear of losing a trade to the fear of losing food or resources which meant certain death. Thus we go into a state of protecting what we have.

Unfortunately, this mindset is detrimental to trading. Exiting provides temporary relief, but it also kills your potential upside.

What makes a good trade?

Is taking a trade and exiting early still a good trade if it gives you a profit? And if you hold on to a winning trade and it comes back to hit your stop loss, does that make it a bad trade? 

If you judge a trade by outcome alone, chances are you won’t make much money in the long run.

A trade is good if you :

1. Follow your entry principles.
2. Hold on through discomfort.
3. Execute your game plan no matter the result.

How can you hold trades longer (Practical steps)?

The best way is to have clearly defined exit rules. This need not be an arbitrary number, like target points, or based on the risk-reward ratio. 

Here are some suggestions:

• Trailing the stop loss loosely, based on ATR or structure.
• Use target levels/zones based on previous price action or support/resistance.
• Reversal signs, like a chart pattern or volume drop.

Whatever you choose – predefine it, backtest it, and follow it religiously. 

Some trades will fail regardless. Don’t course correct over an isolated bad outcome. You are building consistency, not chasing perfection.

Final Thoughts

You won’t go from holding 15 points to 100 overnight. 

Think of it as training in the gym. You grow as you increase the weight progressively. Have the patience to accumulate small wins. Each successful hold conditions your brain to endure discomfort and get over fear.

Happy trading.