Trade Aging Manager: Time-Based Exits
Manages open positions based on how long they've been held, exiting stale trades that aren't performing.
What is Trade Aging?
Trade aging is the practice of tracking how long a position has been open and using time as an exit criterion. If a trade hasn't reached its target within a reasonable timeframe, it may be tying up capital that could be deployed more effectively elsewhere. Time is a cost—opportunity cost—and stale positions represent inefficient use of your trading capital.
Key Principles
Time stops: Exit if target not reached within X periods. Opportunity cost: Capital in stale trades can't find new opportunities. Thesis validation: Good trades usually work quickly. Reducing chop: Avoid death by a thousand cuts. Clean slate: Free up mental bandwidth.
Implementing Time Stops
Review your historical trades to understand how long winning trades typically take to reach target. If most winners hit target within 3 days, consider a time stop at 5 days. The key is that a trade not performing as expected may be based on a thesis that's no longer valid. Exiting allows you to reassess and deploy capital more effectively.
Graduated Time Management
Rather than a hard exit, consider graduated time management. After a certain time, move stops to breakeven. After longer, take partial profits if available. Eventually, close the full position. This approach captures any remaining value while progressively reducing risk as the trade ages. It balances the need to give trades room with efficient capital use.
Practice Risk-Free
Master these concepts with paper trading before risking real capital.
Start Paper TradingDisclaimer: This article is for educational purposes only and does not constitute financial advice. Trading involves significant risk of loss. Cryptocurrency investments are volatile and high-risk. Always do your own research before making any investment decisions.