Market or Limit?

jack hershey · Nov 27, 2012

Quote from WinstonTJ:

Jack,
No idea what securities you are trading but in the equity world market orders are allowed to be held up for a period of time prior to acting on them. The market maker can sit on your market order, pull prices and then fill you at a (better for them, worse for you) different price.

If you read what I wrote you will see that I said MARKETABLE limit order. Pay through. If the stock is trading at 10.49 x 10.51 and you are trying to buy you send an order in to purcahse at $11. In the equity world you will get price improvement and you are required to be filled at the NBO vs. just a market order. Market orders can be held long enough that the market can pull the bid/ask back to a lower/higher price and fill you at $10.59 for example. If you had sent your order in to purchase at $11.00 you would have received price improvement down to the NBO and have been filled at $10.51.

Sending marketable limit orders is always going to be better (and will legitamitley get you filled faster) than a general market order.

If you aren't trading equities there is no reg nms so it's a moot point.

My views on stocks not as sophisticated as yours. My signal for entry lasts about 1 1/2 hours. In this period I make a decision and then price begins its move. The same is true for exits. So, mostly I am exiting to obtain capital to enter (long) a stock that will be performing better than the stock I am exiting. (Cross-over trading).

murray t turtle · Nov 27, 2012

Quote from EliteTraderNYC:

I am designing an automated strategy, just wondering advice on order entry. I am attempting to get into trending stocks, some are liquid, some are illiquid. Should I go with a limit order or am I just wasting time with limits and should use a market? Position size will not be that large, at first. Also is there a formula that might advise me on the amount of slippage that I could expect?

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Elitetrender-NYC
Like[generous-not tight] limit orders, but in trending stocks/strong trending stocks;
better get in or simply suffer stingey payday[not much@all pay].

Hi volume[multiple millions] can help ;
in a strong trend , order execution is not very important.If your not in you cant win.My comments are limited to liquid stuff

Illiquid stocks, ,why bother/short squeezes/horrible slippage??;
if i want illiquid stuff real estate maybe better.

WinstonTJ · Nov 28, 2012

Quote from jack hershey:

My views on stocks not as sophisticated as yours. My signal for entry lasts about 1 1/2 hours. In this period I make a decision and then price begins its move. The same is true for exits. So, mostly I am exiting to obtain capital to enter (long) a stock that will be performing better than the stock I am exiting. (Cross-over trading).

But even still a market order will give you much more slippage and you'll get dinged a penny or two on every entry and exit...

smaranam · Nov 28, 2012

Quote from WinstonTJ:

But even still a market order will give you much more slippage and you'll get dinged a penny or two on every entry and exit...

http://www.elitetrader.com/vb/showthread.php?threadid=254201

oldtime · Nov 28, 2012

Quote from WinstonTJ:

But even still a market order will give you much more slippage and you'll get dinged a penny or two on every entry and exit...

in the market I trade (forex) there is no difference between buying at the market and buying the ask. It only comes into play when all hell is breaking loose. And in those cases if I want to get in or out I want to get in or out at any price. As far as I know I have never been dinged one penny, and if I have, I can make it back up on limit orders where in forex positive slippage is not at all uncommon.

jack hershey · Nov 28, 2012

Quote from WinstonTJ:

But even still a market order will give you much more slippage and you'll get dinged a penny or two on every entry and exit...

What are pennies???

As I said, you are more sophisticaed than I.

I just do crossover trading with winners all the time.

smaranam · Nov 29, 2012

Quote from jack hershey:

What are pennies???

As I said, you are more sophisticaed than I.

I just do crossover trading with winners all the time.

Jack,you do crossover trading,or before the crossover?It`s me,btw...

nillionaire · Nov 30, 2012

Quote from Occam:

Market orders have no place in today's equity market structure. Trade market orders enough, and you'll eventually get filled at .0001 or 199,999.99 (on the wrong side), and you'll be looking at catastrophic losses unless you can get the trade busted.

Stop orders are market orders, so I don't see how anyone can avoid the use of market orders.

oldtime · Nov 30, 2012

Quote from nillionaire:

Stop orders are market orders, so I don't see how anyone can avoid the use of market orders.

if I had a nickle for ever dollar I lost chasing a limit all the way up instead of buying at the market I'd probably have enough to pay for my next commission.

Occam · Nov 30, 2012

Quote from nillionaire:

Stop orders are market orders, so I don't see how anyone can avoid the use of market orders.

Stop limit?

Stop orders are dangerous in themselves anyway. Stops end up being a setup for you to exit at the worst possible time -- combine them with a non-limit order, and you're in the realm of probabilistic suicide, at least with US equities. And why would you even consider them unless you're either overleveraged or unconfident in your position?