I've started trading using the Buy Mkt/Sell Mkt buttons because I'm trying my hand at day trading. However, I've just realized how off the trades are from the chart, whereas I can have $0.80 to $0.90 difference between the click and the recorded buy/sell.... is that normal? Makes it impossible to trade $1 up.
New to MKT Buy/Sell question
- Thread starter VicBee
- Start date
Remember, you buy at the offer and sell at the bid, not the other way around.
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Could be the bid-ask spread and slippage.
If you're running an automated strategy that frequently buys and sells at market, get a co-located server to optimize fills and reduce slippage.
If you're running an automated strategy that frequently buys and sells at market, get a co-located server to optimize fills and reduce slippage.
Yes, I think that also happens. Based in Singapore so the ping is a bit slow.
%%Try swing trading, you will have a better time
And most likely a more profitable time; but a penny or 2 slippage would be very good for swing trading/figure on much more than that, as average, unless its TQQQ or qqq.
Even a real liquid etf like QLD could be much worse when they are buying or selling it hard.
BUT 00.90 on a $50 price would be VERY excessive; on a $3 stock it would be normal + thats why so few experienced traders trade or inVest a $3 stock.
EBIZ[ semi liquid] tends to have much greater slippage than spy\LIQUIDITY LEADER
1. Learn to use a Limit order. This will also improve your understanding of Market orders, as you'll see the difference.
2. What stock are you trading? Try practicing with small orders on a low-priced stock with a tight spread. The spread between the bid/ask price can be quite large for some low volume stocks. Look for a 1-penny difference between the bid/ask prices.
3. Not advice, but Ford (NYSE:F) might be a good choice to practice on. At the moment they have a bid/ask spread of 1 penny: 14.95/14.96. Generally pick one in the S&P 500 they tend to have tighter spreads.
References:
1. Wikipedia: S&P 500 companies:
https://en.wikipedia.org/wiki/List_of_S&P_500_companies
2. Investopedia: Limit Order Definition:
https://www.investopedia.com/terms/l/limitorder.asp
In the last year and half of trading I've set my buy/sell limit orders and thus never considered the spread because days could go by between one and the other.
Over the last week I've started day trading very volatile stocks in the 8 to 30 price bracket moving 0.3 to 0.6 quickly and couldn't preset my prices so I thought I'd try the buy/sell buttons but, as I explained in a previous post, I was looking at the last price rather than the bid/ask, so obviously I was off (as well as delayed high ping, but nothing I can do about that).
I'm trying out trading the T-line (8 exp avg) which gets me buying/selling at least half a dozen times in a couple hours window, something I'd never done before. I'm having fun with it.
Noob mistake... made everyone laugh, moving on.
It’s good to go slow with day trading. It’s possible to make $1 up in between clicks but it’s also possible to lose $1 at the same time. Keep in mind to know the RR ratio while day trading.