You hold your losers longer than your winners, and the log says by how much

Most traders will tell you they cut their losers quickly. The log keeps time better than memory does, and minutes are a unit you can check.

You do not need a platform for this. You need the open and close time of every trade in your log, and a calculator.

The ratio

Add one column to your log: minutes held, from entry to exit. Sort the trades into winners and losers. Take the median of each group. Divide the loser median by the winner median.

That is the whole measure. A result of 1.0 means you hold both for the same length of time. Above 1.0, losers get longer. Below 1.0, winners do.

Use the median because one trade you left open over lunch should not move the answer. The mean is built from every trade, so a single long one drags it.

A worked log

Take 24 made-up trades. Eleven won and thirteen lost.

The winners were held for 4, 7, 9, 11, 14, 17, 19, 23, 27, 38 and 52 minutes. The sixth of eleven is the middle one, so the winner median is 17 minutes.

The losers were held for 6, 12, 17, 21, 26, 31, 37, 41, 46, 58, 74, 112 and 139 minutes. The seventh of thirteen is the middle one, so the loser median is 37 minutes.

37 divided by 17 is 2.18. The typical loser in this log was held a little over twice as long as the typical winner.

Two more facts sit under that number. The thirteen losers took up 620 of the 841 minutes the trader spent in the market, which is 74 percent of the time. And the four longest losers, at 58, 74, 112 and 139 minutes, were each held longer than the longest winner, which was 52.

How firm is the number

Cut it a few ways before you believe it. The mean of the losers is 47.7 minutes and the mean of the winners is 20.1, a ratio of 2.37. Remove the three longest losers and the loser median falls to 28.5 minutes, a ratio of 1.68.

It moves from 1.68 to 2.37 and stays above 1.0 every time. A ratio that survives being cut that way is worth acting on. A ratio that crosses 1.0 when you remove two trades is a coin toss.

Size matters too. Twenty-four trades is a small log, and how many trades before your numbers mean anything is the honest account of how wide the guess is. The ratio is a place to look, and it is not a verdict.

What it means and what it does not

Behavioural finance has a name for the habit of selling winners early and sitting on losers: the disposition effect. A ratio above 1.0 is what that habit looks like in a log. It is a sign that you may be hoping instead of exiting, and it is one of the cheaper signs to find.

It does not prove that. A scalper who takes a small fixed target and gives the trade a wide stop will hold losers longer by design, because the stop is further than the target. A trend follower who cuts at once and lets winners run should land below 1.0, and a ratio near 1.0 would be the surprise. The number has to be read against the plan you wrote. The same 2.18 is structure in one plan and a leak in another.

It also says nothing about size. A trader can hold losers twice as long and still be profitable if the winners are larger. The ratio asks about time. R-multiple asks about money. They are two different columns.

What to do with it

Do not set a target for the ratio. Look at the trades that made it large.

Take the longest quarter of your losers and write one line beside each. Was the stop still where you put it at entry? Did you move it? Did the setup stay valid, or was it only still open? If the same answer turns up beside most of them, that answer is the finding.

Then write one rule that acts on the finding. A time stop is a common one: if the trade has not worked within a set number of minutes, you close it, whatever price is doing. Pick the number from your winners. In the worked log every winner was closed inside 52 minutes, so a loser still open at 60 is already behaving like no winner the trader has had.

Run the ratio again after your next twenty trades, same method, and look at the direction of the change before the size of it.

Find yours this afternoon

Open the log and add the column. If your platform exports entry and exit times, subtract them. If it does not, you have the times in the order tickets. Sort, take two medians, divide.

If the answer is below 1.0, the log has one fewer thing to answer for. If it is above, you now have a number where an impression used to be.