Average Win Duration tells you how long, on average, you held onto your winning trades. It helps you understand how much time passed between when you opened a winning trade and when you closed it.
Average Win Duration = Total Duration of Winning Trades / Number of Winning Trades
Example 1:
- Total duration of winning trades: 300 hours
- Number of winning trades: 20
- Calculation: Average Win Duration = 300 hours / 20 = 15 hours
- Interpretation: Winning trades last about 15 hours on average.
Example 2:
- Total duration of winning trades: 150 days
- Number of winning trades: 30
- Calculation: Average Win Duration = 150 days / 30 = 5 days
- Interpretation: Profitable trades typically close in 5 days.
| How It Can Be Used | Limitations |
|---|---|
| Optimizing profit-taking strategies | Doesn’t consider losing trades |
| Identifying patterns in profitable trades | May be skewed by exceptionally long trades |
| Adjusting holding periods for better results | Doesn’t account for market volatility |
A trader uses Average Win Duration to understand how long they typically hold onto profitable positions.
