POLL: Preferred order entry type for very short term traders

[Thunderdog]

The least popular choice thus far is "limit buy at the bid." Hmm. Since most traders lose money, perhaps the correct course of action is the "reverse George maneuver" on the matter or order entry. Assuming, of course, that they got the trade direction right.

 

[Thunderdog]

Kidding aside, has anyone switched from another order entry type to their currently preferred one? If so, why? And are you glad you switched?

As I noted earlier, I use predefined limit orders which, for the most part, are marketable limit orders. However, I have been toying with the idea of buying the ask at issuance of entry signal.

 

[MandelbrotSet]

Quote from Thunderdog:

Thanks to everyone who participated in this poll. If you are a very short term trader and have not yet voted, then please do so.

An observation, if I may. Since this poll addresses very short term traders, I made the assumption that protective stops and dollar risk, be they mental or otherwise, would be fairly tight. Therefore, it came as no surprise to me that limit orders have been the most popular selection thus far. However, I am a bit surprised by the apparent popularity of market orders in a very short term trading environment. And I am perhaps most surprised that the limit buy at the bid is the least used order type among respondents once an long entry signal is issued.

Any opinions?

Thanks for the intelligent thread and very knowledgeable posts.

I Buy Limit the bid for Longs, Sell Limit the ask for Shorts. It is preferable for short-term intraday traders to ALLWAYS use Limit Orders.

If you use Market Orders, one day you may find yourself at the tender mercies of your broker in terms of the fill you get for your Order, and chances are, you won't be happy with the result. :eek:

Allways use Limit Orders.

 

[MandelbrotSet]

Quote from Thunderdog:

As I noted earlier, I use predefined limit orders which, for the most part, are marketable limit orders. However, I have been toying with the idea of buying the ask at issuance of entry signal.

FTR, I use NinjaTrader, it allows me to predefine the order type, set the risk parameters and the profit level(s) all ahead of time, and the trade is implemented with one click.

 

[Thunderdog]

Quote from MandelbrotSet:

...I Buy Limit the bid for Longs, Sell Limit the ask for Shorts...

Could you ballpark in rough percentage terms how often the market leaves in your intended trade direction without you? I always use limit orders for entry and would love to buy at the bid when I have an entry signal, but I note that I sometimes would not get filled if I did so. (Not that I always get filled anyway.)

 

[Thunderdog]

Okay, last call for votes if you're a very short term trader and have not yet participated in this poll.

 

[Thunderdog]

Well, I guess that the last of the poll results are probably in, as voting has trickled to a stop. I was hoping for between 50 and 100 votes, so I'm not too displeased with the 59 votes as of this writing. Thanks again to all who participated.

As I noted in an earlier post on the preliminary results, I was not at all surprised that predefined limit orders got the highest vote count. I was and continue to be surprised that more than a quarter of very short term traders who responded actually use market orders. Limit buy at the bid continues to be the least popular choice among those who voted, and that is not at all what I had expected. Interesting.

My work with this thread is done. Carry on.

 

[volente_00]

Quote from MandelbrotSet:

Thanks for the intelligent thread and very knowledgeable posts.

I Buy Limit the bid for Longs, Sell Limit the ask for Shorts. It is preferable for short-term intraday traders to ALLWAYS use Limit Orders.

If you use Market Orders, one day you may find yourself at the tender mercies of your broker in terms of the fill you get for your Order, and chances are, you won't be happy with the result. :eek:

Allways use Limit Orders.

I agree but on a fast moving market one must put the limit out higher than the ask or they risk being unfilled before the move happens. If you just sit on the bid behind the others you will often find you get left behind.

 

[jack hershey]

Quote from MandelbrotSet:

Thanks for the intelligent thread and very knowledgeable posts.

I Buy Limit the bid for Longs, Sell Limit the ask for Shorts. It is preferable for short-term intraday traders to ALLWAYS use Limit Orders.

If you use Market Orders, one day you may find yourself at the tender mercies of your broker in terms of the fill you get for your Order, and chances are, you won't be happy with the result. :eek:

Allways use Limit Orders.

For those who wonder where the "wall" of the DOM comes from, above is the answer. Someone else has already explained how to jump over the wall at some IB's.

Most platforms have broker (un)mercy eliminated by using the fast lane type order.

Cascading of orders is not an entry problem, but when you think about whether entry or exit is most inportant, then you get to who is making money and who isn't.

 

[Thunderdog]

Quote from volente_00:

...on a fast moving market one must put the limit out higher than the ask or they risk being unfilled before the move happens...

That may well be, but while I, personally, would certainly consider exiting during a true "fast market," I would not consider entering during one. That's just a little too rich for me insofar as risk identification and containment are concerned.