There’s a fine line between selling too soon and holding your winners too long.
A lot of people online talk about this problem, but very few actually explain a practical solution.
For me, I tend to focus on fewer, higher-quality ideas. Most of my trading revolves around overnight momentum and higher time frame mean reversion setups. These are often the kinds of trades where, if you’re right, the stock can sometimes double or more.
The issue is that even great ideas rarely move in a straight line.
You might think a stock is going from $1 to $4, and maybe it does. But if you’re only focused on that final target, you create a few major problems for yourself:
You don’t actually get paid along the way
You introduce a massive amount of stress into the trade
You aren’t taking “risk off the table” as the expected value worsens
You risk turning a huge winner into a loser – likely
And statistically, the odds of perfectly holding to the final target or it even getting there are still relatively low
Even the best ideas fail sometimes.
Having a great idea but never realizing profits is worse than not trading at all.
One of the best ways I’ve found to solve this problem is through mechanical, linear selling.
Let’s say you buy a stock at $1 and believe it could eventually reach $4.
Most traders think in terms of:
I am going to hold this until it hits 4…
But what I’ve found works much better is selling evenly on the way up.
For example:
Maybe you start selling some at $1.50
And continue selling every $0.20 higher
Keep those sales consistent all the way to $4
Instead of trying to perfectly predict the top, you systematically pay yourself as the stock works.
This accomplishes a few things:
You lock in profits along the way
You reduce emotional decision-making
You take “risk off the table” as the expected valued worsens
You remove pressure from the trade
And you still participate if the larger move happens
Sure, if you held perfectly and the stock goes straight to $4, you won’t make as much as someone who held the entire position the whole way.
But the reality is that very few people actually do that successfully.
Most people either:
Sell far too early
Or ride the position all the way back down
Linear selling creates a middle ground that is far more repeatable over the long run.
This is something I first adopted while working at SMB Capital.
At the time, I actually built a script that automatically fanned out these sell orders for me so the process became very easy.
Over time, I realized this approach dramatically improved both my consistency and my mental clarity while holding larger winners.
That’s also why I built a free Linear Sales Calculator on SaveOnTrading.
You simply enter:
Your entry price
Your total shares
Your starting exit price
Your final target
And the increments you want to sell in
The calculator then maps out the entire sales plan for you.
The goal isn’t to perfectly sell the top.
The goal is to consistently get paid for good ideas while still giving yourself exposure to exceptional outcomes.
That mindset shift changes everything.
You can bookmark this calculator for easy access here.
Best,
Kyle Vallans