Time stops: the exit nobody discusses

[Shadow Trader]

Stops usually refer to price. A time stop closes a position after a fixed duration if the trade has not worked.

The logic suits scalping. A setup that expects a move within three minutes has a limited shelf life. If price is still drifting sideways after eight minutes, the original thesis has probably expired. Holding on invites random movement to decide the outcome.

Tracking this is easy. Review winning scalps and note how long they took to reach target. If 80 percent of winners hit within five minutes, a trade still open at ten minutes belongs to a different distribution.

Time stops also protect against a subtle trap: a trade that goes nowhere ties up attention and margin while better setups pass by.

The method requires a timer, a written rule and discipline to apply it without negotiating.

An easy test is to apply a time stop retroactively to the last 100 trades and compare results.

Has anyone tested a time-based exit, and what happened to the numbers?