Max hold months

Also seen as: Max hold, maximum holding period, hold cap.

When does max hold actually close a position?

Max hold is evaluated at rebalance dates, so a position leaves at the first rebalance at which it has been held long enough — never partway through a period.

where: $R$ is the set of the strategy's rebalance dates, $t_{\text{entry}}$ is the date the position was opened, $N$ is the max hold months you set, and $t_{\text{exit}}$ is the date the position is closed. The practical consequence is that the realised holding period is at least N months and can be longer — up to one rebalance interval longer — so a max hold is a floor on the hold, not an exact stopwatch.

Because the exit lands on a rebalance date, the value you enter has to line up with the rebalance clock: it must be a whole multiple of the strategy's rebalance interval, and the app blocks anything else with "Must be a multiple of {rebalanceEvery} months". That whole-multiples rule belongs to the rebalance cadence itself and is described in full under rebalance.

Defaults in Fincanva

• Off by default. When you switch it on, the value starts at the strategy's own rebalance interval — always a valid multiple — and you raise it from there.
• Entered in months (the field's suffix reads "mo"), up to a maximum of 120 months; the field itself will not take a value outside that range.
• The value must stay a whole multiple of the rebalance interval, so changing the cadence can leave a value you already set invalid — see rebalance.
• A position closed by this rule is recorded with the exit reason Max hold — see exit reason for the full list of causes a backtest records.
• Max hold is one of the per-position exits, alongside take profit and stop loss. It looks only at elapsed time; it does not look at the position's gain or loss.

Worked example

A strategy rebalances every month and has max hold set to 5 months. A position opened on the 12 January rebalance is 5 whole months old on 12 June, which is also a rebalance date, so it is closed there and its trade history shows the reason Max hold. Nothing happens at the February through May rebalances — the clock has not run out yet — and nothing happens between rebalances either.

The quantization shows up when a position does not enter on a scheduled date. Suppose a risk condition forces an off-schedule rebalance on 20 January and a position opens then. Five whole months later is 20 June, which is not a rebalance date, so the position stays on until the next scheduled rebalance after that point and is closed there instead — held slightly more than five months. Now raise the cadence to every 3 months: 5 is no longer a whole multiple of 3, so the app refuses it with "Must be a multiple of 3 months", and the nearest valid settings are 3 or 6 months.

Fincanva does not recommend a holding period, or whether to cap one at all — a backtest shows what a setting would have done on historical data, not what it will do. See Is this financial advice?.