Using a Timer during scalp plays

V

vanman72001

I've been doing a lot of post-trade analysis of my scalping (mostly scalp low-float stocks up huge on the day).
My holding times are generally seconds to a few minutes and average out like this:
Avg Winning Duration: 2 mins 7 seconds
Avg Losing Duration: 37 seconds

After crunching the numbers, it looks like my most horrible trades where I lose a ridiculous amount of money are when I hold the stock for more than 3 minutes. I could literally have saved over 50% or more in losses on the majority of those trades by setting a 3-minute timer at entry and then closing out trades that remained below my entry price once the timer goes off.

Does anyone else use a timer when scalping? What are your thoughts?

If I am in a winning trade, I have usually already scaled out of the majority of my position by the 3-minute mark anyway. So should I just close out the winner at the end of the 3-minute timer? Would I be better off just putting the remaining shares of my winner at break-even or just under a support candle to see if I can catch a move that spikes even higher before scaling out the rest of the way?

By the way, I've been green every day for 14 days in a row with my scalping, and I'm on a nice run for sure. The account is up over 30% in those 14 days. I just want to fine-tune things so I don't have a nasty loss that kills 10% or more of my gains in one day. Mechanical stop losses can be helpful, but they can be tough to implement during scalp plays for a variety of reasons. I'm thinking a timer might really help, especially combined with a mechanical stop loss that is far enough away not to get triggered by a nasty market-maker who is just running stops slightly below a support level.

Any suggestions would be much appreciated!
 
vanman72001 said:
After crunching the numbers, it looks like my most horrible trades where I lose a ridiculous amount of money are when I hold the stock for more than 3 minutes.
More...
The reason why you lost a ridiculous amount of money ain't because you were in the trade for x amount of time. It's more because 1) your entry was horrible and 2) you didn't cut your loser early. Just imagine you got in the same trade, but this time in the other direction.
 
Problem is time’s relative within the market.

Haven’t you guys read The (mis)behaviour of markets by Mandelbrot ?

What does Mandelbrot says about time in The (mis)behavior of market ?

In The (Mis)Behavior of Markets, Benoît Mandelbrot discusses time primarily in the context of financial markets, emphasizing how traditional models often fail to capture the complexity and irregularity of real-world market movements. He critiques conventional financial models, particularly those based on normal distributions and efficient market theories, for assuming a fixed, linear progression of time, which ignores the erratic, fractal-like nature of market behavior.

Mandelbrot introduces the concept of "trading time" or "fractal time", where time doesn't progress evenly as in traditional models (e.g., calendar time), but rather stretches and compresses in response to market activity. In periods of high volatility, events unfold more quickly—trading time accelerates. In contrast, during calm periods, trading time slows down. This reflects the non-linear and irregular nature of time in markets. According to him, financial markets exhibit characteristics similar to natural phenomena, which operate on fractal patterns.

This notion of fractal time implies that market movements are not smooth and continuous but instead can experience large jumps or extreme events, with certain periods seeing intense activity and others seeing almost none. It challenges the assumption of market predictability over uniform time intervals and highlights the importance of understanding the market's complex, often chaotic, behavior over time.
 
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Exactly.

Suppose one was to use a 3 minute time limit.

3 minutes right after the opening bell or leading into the closing bell would likely have a far different result compared to 3 minutes around mid day.
 
I use to use timers, but at some amount of decades, my internal clock new how many minutes/seconds.

We all have ways of exits or new targets. There is no perfect way the same for all.
 
vanman72001 said:
My holding times are generally seconds to a few minutes and average out like this:
Avg Winning Duration: 2 mins 7 seconds
Avg Losing Duration: 37 seconds

After crunching the numbers, it looks like my most horrible trades where I lose a ridiculous amount of money are when I hold the stock for more than 3 minutes. I could literally have saved over 50% or more in losses on the majority of those trades by setting a 3-minute timer at entry and then closing out trades that remained below my entry price once the timer goes off.
So should I just close out the winner at the end of the 3-minute timer?
More...

Looks like you may have answered your own question. Try your suggestion and let us know how it goes. I think it will serve you well. You might also try exiting any position that is not positive within 20 seconds and let us know how that goes.
 
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