Time-Based Stops

The logic for such a time-based stop:

Enter short-term trades where momentum is increasing in the direction of my trade.

I will know almost immediately if my entry is with the momentum in the market. The market is either going towards my stop-loss or away from it.

I have learned from experience that when a trade stays flat, I was probably right about the direction of the move, but that the flat move is all the direction is going to give me. That means the next move is likely to be one that will hit my price stops.

Remember markets make a zig-zag pattern while the auction process goes through the stages of price discovery.

The time-based stop thus allows me to scratch a trade rather than my fullstop or partial stop.

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