How do you use time-stops when trading stocks?

[Robert Morse]

Time-stops mean if the stock doesn't move up upon purchase after some time, you exit.

I would say the most common way this is used is to use a market on close order vs an hour or a day or a week.

 

[monet]

if on the chart the index goes up in a 45 degree angle, anything going up less than 35 degree angle gets cut

This part has me beat. What is 45 degrees.....?
Gann talks about this.
If X = time and Y = price there is an apples and oranges scenario, so how do you get an angle of 45 degrees?
Time might be a 1 hr chart, then you turn it into a daily chart, Y price axis remains constant, X time axis varies....
Truely a mystery to me.
Please explain.

He compared one angle to another, which does make sense.

 

[sillyw10]

What you said makes sense. What Handle123 said also makes sense. Both are contradictory but hard to argue one is right and the other is wrong.

Time is also money. I can argue that traders don't jump ship with the intention to drown. They jump ship with the intention of hopping onto a faster ship. Problem is ... the former happens sometimes.

T = O

O = M

~ T can = M but depends on O

 

[tomorton]

I don't use time stops on running trades, only on entry orders. Some short-term trades need to be opened with a certain market duration or condition ahead, so a late entry would probably not be worth the risk. For example, an entry order for a short-term forex trade set on Thursday afternoon which still had not triggered by late Friday afternoon.

But in running trades, they can keep running as long as it takes for me providing the TA set-up remains valid. Which is why a decent strategy is more than an entry signal.

 

[helpme_please]

T = O

O = M

~ T can = M but depends on O

What is O, T, M?

 

[sillyw10]

What is O, T, M?

T = time
P = price
O = opportunity

M = money

market profile uses TPO to calculate the "value area"..which can be good major S&R levels to watch..but do not be under any illusions..as..there is only one certainty when trading..which is..you can lose as easy as you can win

if time stops allow you to trade effectively then use them..if not..then don't..simple as that!!

 

[dozu888]

This part has me beat. What is 45 degrees.....?
Gann talks about this.
If X = time and Y = price there is an apples and oranges scenario, so how do you get an angle of 45 degrees?
Time might be a 1 hr chart, then you turn it into a daily chart, Y price axis remains constant, X time axis varies....
Truely a mystery to me.
Please explain.

It’s just a visual. Chart is easier to read if it’s 45 degrees based on the scale. Point is if a stock underperforms it gets cut

 

[qlai]

In fact, almost all books that I read don't talk about time-stops. Stops are about prices, not time.

"Experience has proved to me that the real money made in speculating has been SHOWING A PROFIT RIGHT FROM THE START. I made my first trade at the psychological time that is, at a time where the force of the movement was so strong that it simply had to carry through. There have been many times when I, like many others, have not had the patience to wait for the sure thing, I wanted to have and interest at all times.

If the stock does not act as I anticipated, I exit immediately the time is not yet ripe - so I close out."

- Livermore

Note: from "How to trade in Stocks" ... From my notes, so may not be exact quote but very close.

 

[helpme_please]

"Experience has proved to me that the real money made in speculating has been SHOWING A PROFIT RIGHT FROM THE START. I made my first trade at the psychological time that is, at a time where the force of the movement was so strong that it simply had to carry through. There have been many times when I, like many others, have not had the patience to wait for the sure thing, I wanted to have and interest at all times.

If the stock does not act as I anticipated, I exit immediately the time is not yet ripe - so I close out."

- Livermore

That's a time-stop, from the great speculator himself, Jesse Livermore!

 

[dozu888]

honestly speaking, time stop is not that big of a deal.... the only draw back is really just an opportunity cost.