What Are Time-Based Stops?
Time stops are stop losses you place based on how long you've been in a trade—not on price movement.
You might choose to:
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Exit a trade after a specific number of hours, days, or weeks,
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Only hold trades during certain trading sessions,
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Or close positions before the market closes or goes quiet.
How to Use Time Stops
Let’s say you’re an intraday trader and you just entered a long position on EUR/CHF—but after a while, nothing’s happening.
No price movement. No momentum. Just… crickets.
Why keep your capital tied up in a boring trade when another pair, like EUR/USD, is making solid moves?
That’s why you have rules in place.
For example, you may decide to close all trades by 4:00 PM, since you don’t like holding positions overnight and you’ve got a poker game to get to.
Or maybe you’re a swing trader who prefers to close out trades on Fridays to avoid weekend gaps or unexpected news.
The Point of a Time Stop
If your trade isn’t doing anything and your money is just sitting there, it might be better used elsewhere—like in a trade that’s actually moving.
By setting a time limit on your trades, you’re freeing up your capital and giving it a better shot at doing what it’s supposed to do:
Grow.