When to Cancel The Limit Order, Entry Retracement

[SimpleMeLike]

Hello all,

If you are day trader and you use limit orders (or bracket orders with predefined profit targets, stop loss price) to enter a position on pull back or retrace, what is your criteria to cancel or void the trade and wait for another setup?

I am asking because I am considering testing a strategy with waiting for a pullback to enter position with limit order instead of market order once entry signal is true. But I am bit unsure when to cancel the limit order when price does not return to my entry price.

Thank you,

 

[smallfil]

Hello all,

If you are day trader and you use limit orders (or bracket orders with predefined profit targets, stop loss price) to enter a position on pull back or retrace, what is your criteria to cancel or void the trade and wait for another setup?

I am asking because I am considering testing a strategy with waiting for a pullback to enter position with limit order instead of market order once entry signal is true. But I am bit unsure when to cancel the limit order when price does not return to my entry price.

Thank you,

Have you tried the Stop Limit order to get into a trade? I use that a lot. If you have a setup that uses a trigger, I use that as the stop price then, add say $0.20 more. So, an order to buy at say $10.00 (stop) and $10.20 (limit) gives you an opportunity to get filled at a reasonable price without overpaying. In this case, I am willing to pay an extra $0.20 to get into the position or a maximum of $10.20. Of course, if the stock gaps up, I am not chasing it. The stop limit order prevents me from buying it . Those with just market orders are getting the worst of it.

 

[SimpleMeLike]

Of course, if the stock gaps up, I am not chasing it.

Thanks smallfil for response.

When do you decide to cancel the order if price goes in your favor without you in the trade?

 

[smallfil]

Thanks smallfil for response.

When do you decide to cancel the order if price goes in your favor without you in the trade?

If it goes higher above my limit price, I probably, will pass on that trade. Unless, it is just $0.25 more and I really want that stock.

 

[speedo]

I pull a limit trade if it goes to my break even point at 8 ticks (ES).

 

[SimpleMeLike]

If it goes higher above my limit price, I probably, will pass on that trade. Unless, it is just $0.25 more and I really want that stock.

Thanks for your response

 

[SimpleMeLike]

I pull a limit trade if it goes to my break even point at 8 ticks (ES).

Thanks for the response speedo,

Just to make sure I understand you:

If your buy limit order is pending at 3000.00 (ES future contract for example), and price goes to 3002.00, you then pull the order and wait for new signal/setup?

Thank you,

 

[speedo]

Thanks for the response speedo,

Just to make sure I understand you:

If your buy limit order is pending at 3000.00 (ES future contract for example), and price goes to 3002.00, you then pull the order and wait for new signal/setup?

Thank you,

Yes. Most of my trades are entered on a stop but if the trade triggers further than my 7 tick stop loss limit (below/above the entry pivot) I will put in the limit order.