How to Use Time-Based Stops to Protect Your Capital
Most traders are familiar with stop-losses based on price, but fewer use time-based stops—an underrated tool for protecting capital during prop firm evaluations. Time-based stops are especially powerful when combined with psychological discipline and rule-based trading.
What Are Time-Based Stops?
Time-based stops exit a trade after a set period has passed, regardless of whether the price hits a target or stop-loss level. This is particularly useful in:
- Low-volatility conditions
- Choppy or sideways markets
- News-sensitive time zones
Why Time Stops Work in Prop Challenges
When you’re trading with a drawdown rule or strict evaluation window, overstaying in a trade is risky. Some firms like Funded Futures Network and Funding Ticks measure risk over sessions, so sitting in a trade all day could distort your stats—even if you’re right.
Examples of Time-Based Stop Rules
- Exit after 15 minutes if no movement toward target
- Exit 5 minutes before a news event regardless of trade status
- Close all trades by 11:30 AM EST to avoid lunch-session chop
By defining time windows, you prevent frustration and fatigue-driven decisions.
How to Add Time Stops to Your Playbook
Start by reviewing your past 50 trades. Ask:
- How long do my winners usually take to hit target?
- Do I often lose more by holding too long?
- Are losses concentrated in specific time blocks?
If most wins come in under 30 minutes, create a 30-minute max-hold rule.
Combine with Price Stops for Double Protection
Don’t replace price stops—supplement them. Use a time stop to exit early if the trade goes nowhere. This is how professional scalpers and prop traders stay efficient and focused.
How to Track Time Stop Performance
Use your trade journal or a spreadsheet to log:
- Time in trade
- Exit reason (target, stop, time)
- Emotional state pre-exit
Over time, you’ll gain insights on how time-based stops affect performance and whether they reduce emotional decision-making.
Want a printable tracker for time stop testing? Get the Capital Protection Sheet from Prop Firm Press.