Registered User
Joined: 3/7/2005
Posts: 148
|
For all of you traders out there.
Generally do you buy a stock at the market or do you set a price of entry?
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Once I decide to buy a stock I also pick the purchase price range. If the stock is in the range but moving up on the day I purchase it I buy it at market. If the price is moving down, I place a limit order.
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
Thanks no cents,today i bought some RITA about noon and i think because i put it in at the market the specialist got me on the high side.
I will not explain all the details,but from now on i will analyze purchase prices a bit more carefully and view aol real time prices, before trading and not just buy the market.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
There is no specialist in the Nasdaq (RITA is a Nasdaq stock); Only market makers. Your question doesn't have a single answer. It depends on the situation. Example a runaway stock you will never catch at limit, and if you try market you may get at much higher price you expect. How about limit at the inside ask? Food for thought ah!
I think you folks need a little review on placing orders. Review is good. There are times to buy at market, times to buy at limit, and times to pay the offer
it all depends on the cirscuntances. You will need to review and practice - mistakes can be costly if not placing orders in the appropiate way for the specific cirscuntance.
good luck
|
|
Registered User
Joined: 12/13/2004
Posts: 76
|
I use a limit on most stocks. On the more liquid ETF's, such as qs or SMH, a limit is not necessary most of the time as I can get in or out instantly, one of the reasons I prefer them to individual stocks.
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
I use limit on about 80 or 90% of my orders now. As someone above alluded to, market orders work fine on very liquid stocks and are guaranteed to execute, but downside is that price is not guaranteed. And on thinly traded stocks market orders can easily execute a dime or more away from price you saw on screen. One downside to a limit order is that even though the price you set is guaranteed or even better, execution is not. Example is as BigBlock mentions about trying to catch a runaway stock or entering a stock whos price is jittery. You can go crazy constantly cancelling and re-entering your limit order trying to nail it down to the exact price you want as price slowly moves away from you. Solution is simple in most cases. On the buy side when the price is what you like set your limit order a few pennies above the current ask. Nine times out of ten you will get filled at the price you want to the penny, but not more than the lee-way you gave it. Example: I want to buy xyz at 20.25, the ask is now 20.25, so I set my limit order to buy at 20.27. As for stop limit orders, my broker allows me to set two prices on a single limit order...a limit "activation" price, then a limit price, using same strategy above.
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
Thanks for all the info
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
Thanks for all the info
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
Thanks for all the info
|
|
Registered User
Joined: 10/7/2004
Posts: 166
|
GaryB;
These are all great responses.
Let add one recent experience.
DTAS, a stock I,ve been trying to get into. nics "stair stepper chart" but thats not the point here.
I originally had a limit order for 13.60. Have been raising it gradually based on the previous day's low. Yesterday I it down around 13.66. This AM I put a limit in at 13.67. While the stock traded very breifly at that level I missed it probably because the quantity available or whatever was not there.
My lesson (as fpetry so eloquently points out "...On the buy side when the price is what you like set your limit order a few pennies above the current ask. Nine times out of ten you will get filled at the price you want to the penny, but not more than the lee-way you gave it."), is, "I should have" (famous last words) gotten in a couple pennies above 13.64 (my order yesterday which was also missed). I would be celebrating now (stock is trading around 14,22).
While this is a hard lesson for me, I'd repeat my approach since from experience, market orders almost (for me anyway) always seem to go against me somehow.
I leave Market orders to the pros and take my lumps (like dtas).
Happy Charting
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
Motmouth,i agree most of my orders seem to go against me,
after i buy they drop and after i sell they go up,or at least it seems that way.
One tool i started using that you might look at is
in aol finance if you pull up a stock quote before you buy or sell take a look at the real time price vs the delayed price and get a feel for which way the stock is going currently.
It is another tool.
your comments
|
|
Registered User
Joined: 10/7/2004
Posts: 166
|
GaryB;
I hear you, there probably are tools that can help me (don't have aol).
However, I still have not maxed out using the capability of TC so I try to stick to "my knitting." ie. the few things I've learned to do (and I'm still learning everyday) that seem to work for me I stick with it until I'm convinced its no longer working.
I let the chart tell me where to place my bet for an opportunity (I call myself an "Opportunity Trader" Vs a Day or swing or...Trader). We "little people" don't have many advantages in trading so any little edge helps. There will be some dropped passes along the way...so what, get back on defense and try to get the ball back.
Happy Charting
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Well you can get the delayed quote from telechart, you don't need anything else.
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
FRNT closed at 7.79 on aol finance today,
it is showing 7.99 after hours 4:10 pm
please explain
|
|
Worden Trainer
Joined: 10/1/2004
Posts: 18,819
|
I am showing 7.79 for FRNT in TeleChart.
- Craig
Here to Help!
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Guys I have to say, if you are having this dificulties just getting orders fill, there are some huge issues to be resolved in your side. I have been trading for many years and never had the kind of issues you are talking about. If you are playing around to take or give an extrad cent, what is it to you if you are not scalping. Scalpers are the only ones left to deal with that kind of issues. You obviously are not scalpint or daytrading, so I guess I don't get it.
I strongly believe that each persong who post should first give designation as to what kind of trader or investor he/she is. I think things would make a lot more sense. I see people here that swing trade, or hold for longer debating a penny or two to enter a order. It just makes no sense. On the other hand if a scalper comes to me and says "I wasn't sure if I should go in at market or give the bid the ask(inside)" I completely understand that. We scalp 5000, 10000 shrs for .05, or less - a penny is concern here.
One more thing, I am starting to believe that you are either missing something or not too bright.
Who in the hell would use delay data to enter an order - first. Second AOL?? come on guys. Who would use such a service for data. The infrastructure of AOL is a robust as the frame of a Yugo. And last in what trading plataform do you guys live. No wonder you are having so many problems with orders and price issues.
You want to come an play the most difficult, and riskier game on earth with AOL tools and delayed data.
Sorry, but give us a break here.
But to debate a penny for 1000 shrs to be hold for a .50 or whatever - there is no point - you are wasting your time and probably loosing momentum on the trade.
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
the bottom line to this whole issue is buying at the market
When you buy at the market there is a chance that you will pay more than you should.
If a stock is running up and you want to get on board at any price so be it
Generally i think it is best to post a limit price what ever that might be that you are comfortable with.
All of us traders have various backgrounds and that is a given,all opinions are important to me wehther i agree with them or not.
My personal beliefs may be different than yours but i will keep those to myself.
|
|
Registered User
Joined: 12/2/2004
Posts: 1,775
|
I remember when I first started investing/trading in 1997. I used my local bank's broker and placed all orders over the phone. I was still trying to learn how to use my computer. I had heard of online brokers but didn't really know who they were or if there was an advantage. My quotes came from Yahoo Finance and were 20 min. delayed. If I saw something interesting I called my discount bank broker and negotiated a trade. I didn't know any better. I was always asking elementary questions to those with far more knowledge. I guess I was lucky...they answered them without being condescending and pointed me in the right direction. They gave me encouragement and corrected my faults without making me feel foolish. To each his own.
|
|
Registered User
Joined: 10/7/2004
Posts: 166
|
I just checked.
Today I made 11 trades totaling 23,500 shares. Times one penny thats my daily target of $250/day profit or $50K/year.
But thats not the point. My broker doesn't let me place an order which would allow for the flexibilty to fill orders "...if its close add a penny or two and fill it.." I'd love it if brokers let you do that.
You place your order and take your chance. Most of the time I get what I want with Limit orders. When I do not, it is even better than my number I cannot say that for Market orders.
Happy Charting
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
Petry the point taken, but we have to place some order here when some folks are confusing more than helping.
Questions are ok, as you know i try to help more than I should. It takes time.
When a topic is not understood, then ask questions, but don't come here pretending that you know, like you are some kind of guru. The ones who know, will be able to tell that you are just making a fool out of yourself. Not to mention the confusion created to those who don't know.
good luck
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
Motmouth,Far too many times i would put in a market order to buy and check my electronic statement later to find that i already had a loss.
Today i called on frnt and the bid was 7.70 asked 7.71
I put the limit at 7.70 and the order was filled shortly after and the stock finished at 7.79 for today.
The stock was backing and filling because i was watching the quotes on cnbc ticker for a while before buying.
I am going to miss some stocks but generally the limit that i feel comfortable with is the way i am going to go.
Sounds like you were a busy guy today.
gary
|
|
Registered User
Joined: 12/19/2004
Posts: 457
|
As BigBlock said, it all depends.
If I'm getting into an established trend, and stochastics is trending up, that tells me the stock is more likely to close toward the upper end of the range. I'd be more inclined to place a market order in that instance.
The converse is true if I'm attempting to bottom fish, and acquire an investment position.
Order entry doesn't get the attention it deserves.
Generally speaking, the earlier in a trend you decide to enter, you should favor market orders, at least in my opinion. You are looking for that acceleration point where the stock is about to take off, or drop.
The more established the trend, the more backing and filling you have, with investors who got in early selling out to traders and investors who want to get in.
Any trades based on candle sticks should probably be placed as a marke order.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
No matter what your trading system they all boil down to two things--- price and time. The more your trading system depends on price the more important limit orders are. The more your system depends on time, limit orders become less important.
To a daytrader sometimes only holding positions for minutes the fill price is critical.
To a trader who buys a moving average cross and may be holding a stock for weeks or months, market orders are fine.
So I guess the simple answer is it depends on how you trade.
In my own trading I tend to hold for longer time periods so,
99.9 percent of my trades are market orders.
Dont use something because it sounds "sophisticated" let your style determine what you need.
Good Luck
|
|
Registered User
Joined: 10/7/2004
Posts: 166
|
rmr1976/diceman;
Great suggestions.
That sounds like a strategy for market orders. At some point I'll check it out. Stochastics is one of those things on my "to do" list.
Thanks for the ideas.
Happy Charting
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
I agree with diceman. The shorter the hold, the more important the entry point.
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
I think this is a great way to get many opinions from both new and seasoned traders.Also some trade daily others have longer term approach.
I think personally when possible use a limit order,also on a low price stock that you purchase a large amount of shares of pennies are more significant than lets say the purchase price on 100 shares of a 50 dollar stock.
We are here to share ideas and i may not agree with you and vise virsa but i will not make any personal attack against you.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Just remember one thing. Market orders help move the price up in a stock. Limit orders move the price down. If it weren't for market orders none of us could make any money. Do you fair share!!!!
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (HaveNoCents) Just remember one thing. Market orders help move the price up in a stock. Limit orders move the price down. If it weren't for market orders none of us could make any money. Do you fair share!!!!
HaveNoCents I am going to say this again. You are making people very confused, and you must stop. If you do not have a handle in a topic, don't comment on it - it is better to ask or to listen when you don't know.
What in the heck does it mean that Market orders help move the price up in a stock. That comment is as confusing as it can get. And to say Limits orders move the price down is as lame as saying "you will lose money if you go short when it rains".
Listen folks NONE of those comments make any sense. The way in which an order is executed (Market or Limit) have no direct correlation to whether a stock goes up or down. It is the action (selling or buying) of traders, investors, and institutions what make a stock go up or down. Whether those actions are executed at market or limit makes no difference as to the direction the stock will take.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Of course they make sense. Market buy orders take the ask price. Market orders are an uptick, and market sell orders are a downtick. Limit buy orders force the ask price down because it is OBVIOUSLY less than the ask.
There would be no movement in price whatsoever if it weren't for market orders.
|
|
Registered User
Joined: 12/8/2004
Posts: 1,301
|
Big Block, how the heck do you think a market maker works?
If a market maker sees there are more sellers than buyers, he must buy the stock. Now to make up for the loss he is going to take on the stock he has to increase the spread between the bid and the ask. If no one places a market order he doesn't get the ask price. If he doesn't get the ask price he cannot make up the money he lost. Sure, someone can place a limit order between the bid, and the ask, and the price will rise, but this could take a long time. Whenever you see a large spread between the bid and ask it is because the market maker is out of balance. The more market orders placed the faster he gets in balance, and the better the chance the stock will trade normally again.
Given buyers and sellers being equal, market buy orders will increase the price of the stock. Given an imbalance, the marketmaker will make up for the imbalance by changing the bid/ask spread.
|
|
Registered User
Joined: 12/18/2004
Posts: 180
|
I sure aint no expert on this, but what HNC is saying sure makes sense to me. And don't forget about above market buy limits. I'm sure those could move the price up. Please ridicule me if I'm wrong.
|
|
Registered User
Joined: 12/18/2004
Posts: 180
|
Same deal as when you place your stop loss on the books. If only 1,000 people have a stop loss in the same general area on 100 shares a piece (100,000 shares), they're all asking for it (if the MM beleives he can get demand back at a higher price)!
|
|
Registered User
Joined: 1/28/2006
Posts: 291
|
HNC...who moves the market? 70% or greater are program trades by the Big Boys. Do you think the trigger levels are unknown to (or unplanned by) the major players?
'Market Orders' do not a market make...establishing bid and ask is what makes an issue attractive at certain points and unattractive at others. It's either a carrot or a stick. MM's are the choke point and act like flood gates restricting or enabling flow. They also tend to buy/sell in inverse relationship to the majority of the public. The only ones trading at 'market' are the rubes. Even in a strong up or down trend there are periods when a great fill can be found.
Often you'd be surprised to find that a lousy fill is your own brokers fault or due your own impatience (ouch!).
I've used several and found some that regularly (purposefully?) missed my limits in a slow market. I no longer use them. Vote with your bucks if you have to spend them to find someone reputable and fast.
The MM will take it in the shorts for a time on those rare occasions he finds himself on the wrong side of a trade and simply can't manage momo, if the issue gets out of hand you will see several MM's act in concert who normally would not, if this fails theres always the 'plunge protection team'...then momo runs its course and then widen bid/ask and regain control of the situation. The markets are manipulated, often to our benefit (in the short term).
Wide spreads are also used by MM's at times when control is perfect. Remember the 'shake out' before a major run in an issue? Widening spreads on low volume, eh? Its all about an 'orderly' market.
You also discount that the MM always hedges his exposure on the derivatives market as well...the house rarely loses and even rarer still is the big loss. Thats the whole reason for a derivatives market and 'circuit breaker'...spreading risk and managing momo. Markets on top of markets on top of markets...
We are the bottom of the food chain and everyone gets paid before we do.
My big worry? A very slow and very strong harmonic wave that the Big Boys don't know exists.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (HaveNoCents) Of course they make sense. Market buy orders take the ask price. Market orders are an uptick, and market sell orders are a downtick. Limit buy orders force the ask price down because it is OBVIOUSLY less than the ask.
There would be no movement in price whatsoever if it weren't for market orders.
What you are saying here is not what you said in your previous post. Still the type of order do not, REPETE. do not determine the direction of anything. It is not the order itself, but the actions of buyers and sellers that determine a direction. If people start dumping with enough momentum at market will decline until support found, The opposit is true. Also many times seen, market orders can flow all day, and the stock goes nowhere - same strength in both sides.
And yes you got it all wrong. Let me give you an extreme case; it is the best way to discover your ignorance and that of others in aggreement with you. Take a stock that plunges big time due to news - what do you think happens here? your little theory of spread inbalance. NO; what happens is that the specified market maker designated to that stock ( and in case you don't know, each stock has its own market maker)will have to pick up those shrs in the way down (easily understood, that if everyone is selling - including other market makers, and noones wants to buy, someone has to - the market maker making the market for that stock). Then he may ask for a higher price at the inside ask, in some instances as you say open up the spread out of proportion, but that doesn't mean that anyone is going to bid at the same price. Some times someone will, and sometimes nobody will. Some times someone else will take the bid even lower.
You are still confused, very confused about market makers, the games they play, the reading of level II, and the conclusions you have achieved. My advise to you is to revise all of this material fully or you will pay a much higher cost of tuition as I am sure you already do. And that is fine, but please do not transmit your confusion to others.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (HaveNoCents) Of course they make sense. Market buy orders take the ask price. Market orders are an uptick, and market sell orders are a downtick. Limit buy orders force the ask price down because it is OBVIOUSLY less than the ask.
There would be no movement in price whatsoever if it weren't for market orders.
There would be no movement in price whatsoever if it weren't for market orders. NOT TRUE AND A SIMPLE EXAMPLE OF THIS CAN BE FOUND IN BEFORE, AND AFTER MARKET MARKETS IN WITH MARKET ORDERS ARE NOT EXISTENT AND PRICE CHANGES ARE A REALITY.
Market orders are an uptick, and market sell orders are a downtick. THIS IS NOT TRUE ALWAYS - ONLY IF THERE ARE MORE BLOCKS GOING AT THE BID, THAN AT THE ASK. EXAMPLE _- YOU HAVE A BLOCK OR 100 AT BID, 100 AT THE ASK, AND 200 AT THE ASK YOU TICK GOES UP. THE REDIPROCAL IS TRUE - AGAIN IS NOT THE TYPE OF ORDER BUT THE ACTIONS OF PARTICIPANTS.
Limit buy orders force the ask price down because it is OBVIOUSLY less than the ask. NOT TRUE IN FACT THE IT IS THE AMOUNT OF PARTICIPATION WILL MOVE THE STOCK - EXAMPLE AND IN FACT WILL SHOW THE OPPOSITE OF YOUR STATEMENT HERE - LOOK AT A LEVEL II SCREEN AND LETS SAY YOU HAVE 15,000 SHRS IN THE INSIDE BID AT 5, AND YOU HAVE 1000 SHRS AT 5.01 ON THE INSIDE ASK. THE GREATER DEMAND WILL EAT UP THE INSIDE ASK, BY BUYING INTO IT, AND FORCING THE ASK TO GO UP UNTIL DEMAND IS SATISFIED. THEREFORE THE PRICE WILL MOVE UP.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (Stmjd74) I sure aint no expert on this, but what HNC is saying sure makes sense to me. And don't forget about above market buy limits. I'm sure those could move the price up. Please ridicule me if I'm wrong.
AGAIN HERE IT IS NOT THE TYPE OF MARKET ORDER BUT THE ACTION OF PARTICIPANTS WHAT WILL MOVE THE STOCK. THE TYPE OF ORDER JUST EXECUTE THEIR INTENTION IN A PREDETERMINED WAY.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
QUOTE (awshucks) HNC...who moves the market? 70% or greater are program trades by the Big Boys. Do you think the trigger levels are unknown to (or unplanned by) the major players?
'Market Orders' do not a market make...establishing bid and ask is what makes an issue attractive at certain points and unattractive at others. It's either a carrot or a stick. MM's are the choke point and act like flood gates restricting or enabling flow. They also tend to buy/sell in inverse relationship to the majority of the public. The only ones trading at 'market' are the rubes. Even in a strong up or down trend there are periods when a great fill can be found.
Often you'd be surprised to find that a lousy fill is your own brokers fault or due your own impatience (ouch!).
I've used several and found some that regularly (purposefully?) missed my limits in a slow market. I no longer use them. Vote with your bucks if you have to spend them to find someone reputable and fast.
The MM will take it in the shorts for a time on those rare occasions he finds himself on the wrong side of a trade and simply can't manage momo, if the issue gets out of hand you will see several MM's act in concert who normally would not, if this fails theres always the 'plunge protection team'...then momo runs its course and then widen bid/ask and regain control of the situation. The markets are manipulated, often to our benefit (in the short term).
Wide spreads are also used by MM's at times when control is perfect. Remember the 'shake out' before a major run in an issue? Widening spreads on low volume, eh? Its all about an 'orderly' market.
You also discount that the MM always hedges his exposure on the derivatives market as well...the house rarely loses and even rarer still is the big loss. Thats the whole reason for a derivatives market and 'circuit breaker'...spreading risk and managing momo. Markets on top of markets on top of markets...
We are the bottom of the food chain and everyone gets paid before we do.
My big worry? A very slow and very strong harmonic wave that the Big Boys don't know exists.
establishing bid and ask is what makes an issue attractive at certain points and unattractive at others. It's either a carrot or a stick. MM's are the choke point and act like flood gates restricting or enabling flow. They also tend to buy/sell in inverse relationship to the majority of the public. AGREE WITH THIS - MARKET MAKER CAN MANIPULATE STOCKS BUT TO A CERTAIN POINT ONLY. THAT IS WHY YOU PICK HIGHLY DINAMIC TRADED STOCKS WHERE THE PRESENSE OF MANY MARKET MAKERS MAKE DISCREPANCIES LESS EXISTANT DUE YOU THE BATTLE GOING ON BETWEEN THEM.
You also discount that the MM always hedges his exposure on the derivatives market as well...the house rarely loses and even rarer still is the big loss. Thats the whole reason for a derivatives market and 'circuit breaker'...spreading risk and managing momo. Markets on top of markets on top of markets...
We are the bottom of the food chain and everyone gets paid before we do.
NOBODY DISCOUNTED ANYTHING HERE - ANYONE WHO DOES ANY SERIOUS DAYTRADING MUST LOOK AT THE DERIVATIVES OF THE MAKETS THEY ARE TRADING - I THINK I MENTIONED NOODLES IN MAY OF MY POST IN REGARDS TO DAYTRADING - SOMETIMES I JUST ASSUME IT IS UNDERSTOOD.
THE SAME DERIVATIVES THE MARKET MAKERS LOOK AT OR FOLLOW I DO AND YOU CAN AS WELL NO ADVANTAGE THERE, EXCEPT INTERPRETATION.
Wide spreads are also used by MM's at times when control is perfect. Remember the 'shake out' before a major run in an issue? Widening spreads on low volume, eh? Its all about an 'orderly' market.WHAT DOES HAVE TO DO WITH TYPE OF ORDERS.
|
|
Registered User
Joined: 10/7/2004
Posts: 2,126
|
And as to free myself from all of this nonsense " I must let you know that I aggree with everything that all the experts have said, aggree that they are on the right track, wish you all the luck and therefore I commend you to follow the advice of the experts.
good luck
|
|
Registered User
Joined: 3/7/2005
Posts: 148
|
Wow i never thought i would get such a tremendous response to this subject.
I purchased 1,500 shares of rita at the market.
The bid was 4.26 and the asked was 4.31
I paid 4.33 yes i did take the stock higher by buying at the market,if i had just purchased a few hundred shares it would not have had the effect. Activity was relatively quiet at that time.
If a stock is going up and you must have it go for the market price.
If i had it to do over again i would have set a limit,why write a blank check???
After my purchase at 4.33 it gradually dropped about 10 cents
And by the way this is an open forum not a wall street journal article so we all are entitled to our opinion,
read them all and decide for yourself
|
|
Registered User
Joined: 12/18/2004
Posts: 180
|
Well I sure never thought about all that. I admit, I am an ignorant fool! And I thank you guys very much for providing this info.
|
|
|
Guest-1 |