Average Holding Period

Mean trade duration from entry to exit -- what it reveals about strategy tempo and turnover.

What is Average Holding Period?

Average holding period is the average amount of time your strategy stays in a trade, measured from entry to exit. Think of it as a stopwatch that starts when you open a position and stops when you close it -- the average holding period is the mean of all those stopwatch readings across every trade in your backtest.

A short average holding period means your strategy gets in and out quickly. A long one means it holds positions for extended periods. This metric gives you a sense of your strategy's tempo -- is it a sprinter or a marathon runner?

How It's Displayed

Simula displays the average holding period in a human-readable format using days, hours, and minutes. Short holds show minutes or hours (like 1h 30m), while longer holds include days (like 3d 4h 0m). This makes it easy to read regardless of your timeframe.

How It's Calculated

For each completed trade (one that has both an entry and an exit), Simula measures the time between the entry and exit. The average holding period is the mean of all those durations:

Average Holding Period

average holding period = sum of all trade durations / number of completed trades

Calendar time, not candles

The duration of each trade is measured in calendar time (actual elapsed time), not in number of candles. This means holding a position for 10 candles on a 1-hour chart is 10 hours, while holding for 10 candles on a daily chart is 10 days. Keep your timeframe in mind when interpreting this number.

What about trades that are still open at the end of the backtest?

It is counted. Simula closes a position that is still open at the end of the backtest at the final candle's close, labels the exit Backtest End, and includes it like any other trade, so its holding time runs from its entry to that final candle. See Reading Your Results for how that final trade is labeled.

Worked Examples

Consistent trade lengths

A strategy completes 5 trades on a 1-hour chart:

Trade 1: held for 4 hours
Trade 2: held for 8 hours
Trade 3: held for 6 hours
Trade 4: held for 12 hours
Trade 5: held for 10 hours

Average holding period = (4 + 8 + 6 + 12 + 10) / 5 = 8 hours. Displayed as 8h 0m.

One long trade skewing the average

A strategy completes 5 trades, but one is much longer than the rest:

Trades 1-4: each held for 2 hours
Trade 5: held for 24 hours

Average holding period = (2 + 2 + 2 + 2 + 24) / 5 = 6.4 hours. Displayed as 6h 24m. Even though four out of five trades were short, the single long trade pulls the average up significantly.

Reading Your Results

Short holding period (minutes to hours)

Your strategy trades frequently and doesn't stay in positions long. Common for strategies on intraday timeframes or those with tight exit conditions.

Strategies with short holding periods trade frequently, which means trading costs are paid on every round trip. Even small per-trade costs compound quickly across hundreds of trades.

Medium holding period (hours to days)

Your strategy holds positions for a moderate amount of time. Common for swing-trading strategies.

Long holding period (days or more)

Your strategy holds positions for extended periods. Common for trend-following strategies that ride large moves.

Things to Watch Out For

Averages can be misleading

As the second example above shows, a single unusually long or short trade can shift the average significantly. If your strategy has a mix of quick scalps and occasional long holds, the average alone won't tell the full story. Look at individual trades in your results to get a better feel for the distribution.

Zero means no completed trades

If you see an average holding period of 0, it means your strategy didn't complete any trades during the backtest -- either no entry conditions were triggered, or positions were opened but never closed.

Win Rate and Expectancy -- tells you how often your trades are profitable and how much they make on average. Combined with holding period, you can understand whether your strategy makes many quick trades or fewer, longer ones.

Exposure -- the percentage of time your strategy has an open position. A short average holding period with many trades can still result in high exposure if the strategy re-enters quickly after exiting.

Profit Factor -- the ratio of gross profits to gross losses. Helps you understand whether the time spent in trades is producing enough profit relative to the losses.