How long positions are held, which drives capital efficiency, exposure to gaps, and how much of an edge you can harvest per year.
Duration should be measured separately for winners and losers. In most working strategies winners are held longer than losers - the classic healthy ratio - while the disposition-effect produces the reverse in undisciplined records: quick winners, lingering losers.
It also determines which risks apply. Positions held overnight carry gap-risk and overnight-exposure; positions held over weekends add weekend-risk; multi-week holds accumulate event exposure such as earnings. An intraday strategy trades a different risk profile entirely, not merely a faster one.
Compare duration against the horizon at which your signal actually works - see edge-ratio. Holding a five-day signal for twenty days is not patience, it is trading a position for which you have no evidence.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.
Educational only, not advice. Spotted an error? Post in Site Feedback.