What is the best order type?

[voko119 0]

If you are watching a stock, and it’s at 8.00 and you are looking for it to hit a new high (of 8.05) and then you will buy 100 shares long, on DAS trader, do you place a buy limit order at the price you want to buy it at (8.05 in this case) or do you just jump in with a market order? I know you need to move fast and I am not sure the best way to get in (type pf order).

 

 

[Robert H 455]

Andrew recommends marketable limit orders. So in your example, you would press the hotkey/hot button when the price hits 8.05 and send a marketable limit order for ASK + 0.05. Depending on the price action, you will get filled anywhere between 8.05 to 8.10. Please let me know if that makes sense.

 

You can find more information about order types in Class 3.

[voko119 0]

I am still a bit confused. In this scenario, I was watching a candle and looking for it to hit 8.05 and it was at 8.00. I (foolishly because I didn't understand what I was doing) placed a limit order at 8.05 thinking that it would buy it when it hit 8.05 and it bought the stock at 8.00. I now understand that by placing the limit order, I was saying, "buy the stock, just not above 8.05" which is not what I want. I then looked into a buy limit order and that allows me to add a trigger price, which it set to 8.05 and then it had a limit area and I put 8.08. It just took forever to set it up and I was thinking that if I am in a serious trade and need to move fast this won't work. You're saying use a marketable limit order which buys at market and not above the limit?

 

I guess my MAIN question is, do you set up the buy "ahead of time" or just use your hotkey and do it on the spot when you hit your number?

 

Thanks again for your help!

 

 

[Robert H 455]

Most of us--including Andrew and myself--don't setup orders ahead of time. We use hotkeys on the spot. This allows for quick execution based on quick decisions. I recommend that you familiarize yourself with hotkeys (keyboard) or hot buttons (on the Montage). It really is necessary if you plan on trading like a professional.

 

A marketable limit buys at the Ask, up to a certain amount (I use 0.05). It is like a market order with a pre-defined maximum in case the price spikes quickly. This way you don't end up getting a poor fill price. It increases your probability of getting filled in exchange for the chance of a slightly greater execution price.

 

What you were trying to do is possible via a BUY STOP ORDER. This type of order triggers a buy at a price above the market.

 

Let me know if you have any further questions.