Suppose you want to build a trading system and you already have buy rules but still trying to found the best sell rules that make your system the most profitable. In order to not loose your time and to make sure your buy rules are correct, I suggest that you work first with an exit after N day as sell rule, you can vary N to make sure your system is profitable over different holding periods. If you found your system to be profitable then you came up with good buy rules and you can now begin working on sell rules, stops… If it is not the case then forget this system and start looking for another one.
A simple trading system that use a set of buy rules and a simple exit after N days, will show you if you use the right buy rules. A high percentage of profitable trades are very important and you should only consider system that showed the higher number of profitable trades.
Many times I came up with trading system that show a percentage of profitable trades of more than 65% and a negative performance with a holding period of 5 days and then after modifying sell rule, I improve this to 75%, sometimes more and get a nice return.
This is not always the case, but the most important to know here is that working with a system that show more looser than winner with a fixed holding period is a bad ideas, unless your system show great return.