What do you guys think of using time-based stops in scalping? There are times where I am in a position for several minutes, market is going nowhere but my hard stop still has not been hit, even if it is a narrow, 4-6-tick stop. I have some time-related rules in my trading, namely a "2-minute break after each closed trade (either a win or a loss)" which prevents stop-and-reverse or revenge trading behaviour which I found leads to grinding many contracts, reversing positions and getting hit by many small losses. Do you use time-based stops and what is your experience with them?
if you're serious about this try to back test the strategy. never heard of anyone using arbitrary time based stop losses in the institutional world.
Attached is a short, OLD, reprint from the days of trading pits. This has been in my digital archives for at least 15 years, probably longer. I was not smart enough to maintain the file time-stamp. I offer ONLY as food for thought, NOT as actionable or valid set-ups, methods, or techniques. Remember, in the pit days, pit traders swung big dicks in a different market environment. Different for example, ETFs have since overtaken mutual funds, and as you'll recall, mutual funds buy and sell at only one time during the trading day. This effect on time has been blunted via participant acceptance of ETFs. Again, the attachment is only food for thought, not as actionable or valid set-ups, methods, or techniques. Edit... the charts in the reprint are from August 2003... therefore this has been in my archive for only 14 years max, not 15 years or more. Sorry.
No offense but I just saw your post about wanting to be given a chance in a prop firm. If you think you're ready to join a prop firm and make money, why ask a question like this? Reminds me too much of our friend @Jdesey who first claimed to be profitable trading ES, but wanted more volatility so he switched to NQ, and now to CL, and all along the way asked questions about what is the best time to trade the CL, when the market it open, all sorts of crazy amateur stuff. If he truly was profitable in ES, he should have just stayed there! LOL If someone was going to suggest a prop firm for you initially, how can they even think you'd be a good candidate if you ask about time stops? If you've been pouring over charts for years, the answer should be within you, or you should at least know how to find it yourself.
I don't use them but there are those who advocate them eg Linda Bradford Raschke says if trade is not going anywhere in 7 bars, get out....
@Gotcha I am just looking to improve my trading, constantly. You mentioning pouring over charts is an offense to me. I do not use charts other than for glancing at a daily chart at the beginning of the day to see where major levels are. Charts are not used by professionals
Let me see... a chart has a column for time and a column for price. You're asking right now about time, but since this is something plotted on a chart, that professionals don't look at, why even bother with time? If a chart is too basic for a professional, I would image that the time factor is also of no consequence to a pro because the price would eventually get to where ever they say its going. Lastly, regardless of a professional uses, you're clearly not in that field, so you're stuck using whatever the retail trader uses. And if you don't think charts are good enough, then there isn't much left unless you're just going to memorize price quotes as they come off the T&S.