Every trader who just got into a day trading always has many questions. One of those questions is how long they can hold the stock in day trading. The answer to that question will significantly affect their potential profit. To find that answer, you need to consider these things.
Follow your trading plan
Always trade according to your plan. In other words, you have to follow your plan to know the duration of time to hold a trade or the amount of trade you take.
Therefore, you have to have a trading plan, a good one. Without a trading plan, then the rest of the advice will not help you.
Pay Attention to the Price Wave
Price never moves in a straight line. Once the price is rising (uptrend), it will normally rise, pull back a little, then, rise again. Buying on the initial rise, will not give you the certainty that the price will continue rise after a pullback.
The same process also happens when the price is falling (downtrend), it falls, pulls back, then falls again. If the trader goes short on the decline, there is also no certainty that it will continue to fall after the pullback.
So, before you think of the duration to hold the trade, you need to decide first whether you will hold through a pullback or not.
That is also a hard decision to make. The constant winding in the price means there will always tiny pullbacks occur over time. Thus, you have to also think of what a pullback means to you.
If you decide to not holding through a big pullback, then your potential profits are limited. The limitation depends on how much the price move in a single thrust in your direction.
Conversely, if you want to hold through pullbacks, you have the chance to get bigger profit since you may end with the price that makes multiple waves in your direction.
Also read: The Best Time for Day Trading