Time Stop

A Time Stop is a rule-based exit strategy where you close a position simply because it hasn't moved in your intended direction within a predetermined period. If your analysis says a trade should take 3 days to play out and it has been 5 days with no progress, you exit—regardless of whether the trade is at a profit, a loss, or breakeven.

In trading, time is capital. Every day your money is tied up in a "dead" trade is a day it could be earning returns in a different, high-momentum trade.

• Prevents Stagnation: You avoid the "zombie trade"—the position that doesn't trigger your stop loss but also never goes anywhere.
• Improves Efficiency: It keeps your capital rotating toward active, high-probability setups.
• Reduces Uncertainty: It forces you to re-evaluate your thesis. If a stock hasn't moved, your original reason for buying is likely no longer valid.

Set a "Time-to-Target" for every trade:

1. When you enter, calculate the expected time for the price to reach your target.
2. If that timeframe passes without the price reaching the target, close the position.
3. Use the freed-up capital to find a new, more promising setup.