Time stops are stops you set based on a predetermined time in a trade.
It could be a set time (open limit time of hours, days, weeks, etc.), only trade during specific trading sessions, the market’s open or active hours, etc.
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For instance, let’s say you are an intraday trader and you’ve just put on a long trade on EUR/CHF and it hasn’t gone anywhere.
We’re talking real snoozeville here!
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Why keep your money locked up in this trade when you can use it to take advantage of this one…
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More movement, more pips! Yeah, baby!
Because of your predetermined rules and the fact you do not like to hold trades overnight you have decided to close the position at 4:00 pm when you’re usually done for the day, and go off to your bi-weekly poker tournament.
Or maybe you are a swing trader and you decided to close your positions on Friday to avoid gaps and weekend event risk.
Also, having some margin tied up in a dead trade could be costing you an opportunity in another great trade setup somewhere else.
Set a time limit and cut off that dead weight so that money can do what it is meant to do… Make more money!