Time Stop

[VingTsunKuen]

Do you use so called time stop loss?

For example you enter the trade and first 3 candles does not go in to your favor or you just do not like price action after you have entered the trade.
Would you get out whit a small loss or at break even?
Do you think that this would be "Cut your losses short...." part of trading proverb?
Thanx in advance,
VTK

 

[arabianights]

yep - and I'm pretty sure it loses me money through impatience!

 

[VingTsunKuen]

Thanx Gama:!:
I also do not have formal rule as part of mine strategy.
I am quite green as a trader and more experience would help whit this.But it looks like to me that most of mine successful trades went almost immediately into price action for which one could say that it is satisfying.
When i see price hovering around entry level and behaving like there is "equilibrium"
between buyers and sellers i could say that i do not like it and get out.We could have a spike or price could go up/down for a little bit more.That could be enough to activate stop loss.
So basically,i feel than more like gambler than a trader and i do not like this.
Cheers,
VTK

 

[VingTsunKuen]

yep - and I'm pretty sure it loses me money through impatience!

So you would like to say that it is not such good idea in your case?
May be sometimes it is not a good idea and sometimes it would be good thing to do...
I am not impatient.But there are times when after entering trade i can say:"yeah,this is nice.." and also there are times when i can say that it is opposite.
May be that experience can create this "gut" feeling..
Cheers,
VTK

 

[VingTsunKuen]

Here is an example.

On mine M30 chart EMA50 showed me a direction to be traded.M5 Stochastic was overbought in downtrend.Price was in upper part of trend channel.So i have thought this could be nice trade.
After all entry rules have been met i have went short.4 M5 candles passed by and price was hovering around mine entry level.This 4 candles managed somehow to throw stochastic almost in oversold.As i was at the time -6 pips i decided to take a small loss and get out of this trade.
If i were 10 or 15 pips in positive territory i think that i would stay in the trade.
After i closed the position price went down for 25 pips(mine first target would not be hit whit this) and then got back to about (+)10 pips from mine entry level.
I am cool whit this..There are still 3-4 hour to watch the market.May be there will be better trading chance.
Regards,
VTK

 

[teojh]

once i waited more than a week for a trade to start moving, it was nonsense man. Then i read that jesse livermore uses a time stop. So i implemented a 5 day time stop. So far, its not used yet.

 

[tomorton]

Time stop is useful, prevents your money just sitting around not working for you. You can demonstrate where the time stop should be probably more easily with candlesticks than anything else. Note the pattern that gets you into the position and mark your entry point. Let's suppose its a double top to get you in short. Then, when a number of further candlesticks have gone by, it will be quite obvious that the pattern that got you in is no longer there - the double top has not confirmed and proce is ranging sideways. A single top and a range is not a short entry signal, so other traders will not be entering the position you're in. It would be a toss of the coin as to whether price emerged from the range up or down, and 50:50 odds are just not good enough.

 

[Pippy5000]

I don't kick myself when I get stopped out as it is the cost of doing business. I only kick myself when I second-guess myself and bank a loss out of fear that I might get stopped out for the full amount. Sometimes the trade becomes positive, sometimes it doesn't, but it doesn't matter. Either way I abuse myself for entering into a trade and then bailing out before the resistance or supports I had chosen earlier to place my stop behind had been broken.

However, I'm not a tech or candlestick trader so to each his own.. I'd say that anything which helps you psychologically is a good technique. After you've learned everything you need to know about trading it becomes more of an emotional game than anything else.

 

[VingTsunKuen]

Thank you guys for great comments!
Time have showed that getting out of yesterday described trade at -6 was good idea.Otherwise i would be -30.
I will use this now and than when i do not like price action after i have opened position.
Even if it turns out that price goes into mine favor after i closed position,i will be cool with it.
Mine grandpa used to tell me:"Son,do not run after women or a tram,another one will always come.":cheesy:
I think that same is with trades.
Cheers,
VTK