Hot Keys - Buy Ask +.05/Sell Bid -.05

F

Fatsweatybulldog

Hey guys I'm a fairly novice trader and staring to get my Hotkeys situated and configured. I've read over and over about when your trying to get into a long position you should have your hot key set to Buy Ask + .05 and when your selling to have it set at Bid - .05. I understand why you would use these commands when your trying to get into a stock moving up or down quickly. However, at times won't you be paying top dollar? Or selling low? Wouldn't you get a better price if you bought at Bid + .05 and sold at Ask - .05? IB offers a between Bid and Ask price. Has anyone used this method? Especially for a stock that has a large spread.

Does my buy influence the stock at all by buying at ask? Does it trigger the ALGO's or HFT to follow suit? Or am I guessing to much and trying to bargain shop rather then sticking with my plan? This is such a mind game and I'm stuck in I must be not buying the stocks at the right price. It's funny...I had a few really good weeks and finally had the talk with my wife about wanting to really try this full time. Literally, that was two weeks ago and I've had a crappy two weeks. I think its because I'm stuck in my head that better do this right because I really enjoy it and if I don't make money right away I'll be forced to tell the wife. Sorry got off topic. Just had to vent.

So again, if a couple of traders could explain their hotkeys or the theory behind the Ask+.05 "" I'd appreciate it. I'm not looking to get called a moron and to give it up so if you have some teaching spirit please let me know.
 
Problem with resting limit orders on a lit exchange usually don’t get hit until the market passes through and your bid is now on the ask.

A lot of order flow is through dark pools and brokers dealing with firms who are paying for customer order flow.

So market is say 10.00 and 10.05. You jump on to buy at 10.00 or say 10.01. The market can trade at 10.015 or 10.01 off exchange and your order won’t get hit. You’ll get filled when the market is 9.95/10.00 and you paid the spread anyway.

Reason for having ask +.05 is you basically want in at market but don’t want to send a market order ( which is a blank cheque) and your sending a marketable limit since it’d above the current ask and as a discretionary trader, 5 cents isn’t much sometimes between when you decide to buy and when you actually click.
 
Metamega said:
So market is say 10.00 and 10.05. You jump on to buy at 10.00 or say 10.01. The market can trade at 10.015 or 10.01 off exchange and your order won’t get hit. You’ll get filled when the market is 9.95/10.00 and you paid the spread anyway.
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You need to chart this out, MM: what you're saying is that it's better to buy at 10.04 than at 10.00, because, gee, the market moved. :rolleyes:

FSbulldog: 8,000 years ago, I set my bid to Bit+tick, and set my ask to Ask-tick. (Except for front-month futures, which are 0-tick or 1-tick different...) I've never seen a reason to not work an order; never seen a reason to give away money. :cool:
 
Depends on the trade I guess. If you want in the trade, I just lift the offer. Trying to work the order to to save a penny usually cost me more chasing.

This is more for entering pullbacks and my entry is on strength into the direction of trade.

I have a mean reversion strategy that revolves around using resting limit orders but I’m more or less trying to get a bargain on the stock. 75 percent or more of the time I never end up getting in at the price I wanted.
 
Fatsweatybulldog said:
Hey guys I'm a fairly novice trader and staring to get my Hotkeys situated and configured. I've read over and over about when your trying to get into a long position you should have your hot key set to Buy Ask + .05 and when your selling to have it set at Bid - .05. I understand why you would use these commands when your trying to get into a stock moving up or down quickly. However, at times won't you be paying top dollar? Or selling low? Wouldn't you get a better price if you bought at Bid + .05 and sold at Ask - .05? IB offers a between Bid and Ask price. Has anyone used this method? Especially for a stock that has a large spread.

Does my buy influence the stock at all by buying at ask? Does it trigger the ALGO's or HFT to follow suit? Or am I guessing to much and trying to bargain shop rather then sticking with my plan? This is such a mind game and I'm stuck in I must be not buying the stocks at the right price. It's funny...I had a few really good weeks and finally had the talk with my wife about wanting to really try this full time. Literally, that was two weeks ago and I've had a crappy two weeks. I think its because I'm stuck in my head that better do this right because I really enjoy it and if I don't make money right away I'll be forced to tell the wife. Sorry got off topic. Just had to vent.

So again, if a couple of traders could explain their hotkeys or the theory behind the Ask+.05 "" I'd appreciate it. I'm not looking to get called a moron and to give it up so if you have some teaching spirit please let me know.
More...


Day trading stocks on fast timeframes, read or listen to Flash Boys by Michael Lewis to see how you are being gamed. There are ways to mitigate but you at least need to understand the the playing field, otherwise you are the ball getting tossed around.
 
tommcginnis said:
You need to chart this out, MM: what you're saying is that it's better to buy at 10.04 than at 10.00, because, gee, the market moved. :rolleyes:

FSbulldog: 8,000 years ago, I set my bid to Bit+tick, and set my ask to Ask-tick. (Except for front-month futures, which are 0-tick or 1-tick different...) I've never seen a reason to not work an order; never seen a reason to give away money. :cool:
More...


The opportunity cost far outweighs saving pennies.
 
its not a one size fits all solution. This platform is compatible w IB
i will use a hotkey to buy at ask+ or sell at bid- to enter and exit a fast mover but I don't use limit orders for fear of a crazy fill.
 
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