Hey Mike,

I had a quick question with regard to order execution style and what orders you use.  I know that on our keyboard, we have presets for ARCABidTier and ARCAOfferTier that are limit orders and the custom SWEEP keys that are market orders that process 3c through the bid or the offer.  Although I’m working on my keyboarding skills and know I need to get faster, and although the SDOT Stop keys don’t work on the demo, I was wondering from your perspective whether a market order hitting the bids or taking the offers should be used in order to exit a position immediately, both from a rip and a chop standpoint.

Example:  I started trading NEM today when I saw the Gold futures and other Gold stocks getting smacked around in the afternoon, and I noticed that NEM was one of the few that hadn’t fallen yet.  I shorted the stock @ 50.56 below the intraday resistance @ 50.60, with my mental level to exit at 50.62 (6c risk, and was looking to to see NEM drop below the 40c support level and make it back to the 20c intraday support).  The stock dropped from the 60c resistance test, and the larger orders sitting on the offer continued to move down with it every 10c (if it was trading at 56c, there would be a 5c layer in the Book totaling 7k shares at 63/64/65/66/67c), but some large orders appeared on the bid in the Book around 40c and the stock popped a little.  The offer continued to hold at 48c, and this is where the price began to ping-pong back and forth between the low and high 40c area.

I saw the dynamics of the stock change when the offer began to lift a little and those larger offers began to disappear, and I went to hit out at that 48c level with a limit order; however, I wasn’t fast enough, so I used the sweep key to buy on the offer when my limit order didn’t fill and ended up getting filled @ 50.53.

I don’t know if I’m doing something wrong with the way I’m executing or if I should be thinking differently, but after going through the SMB Glossary and watching GMan’s videos on the keyboard and order exectuion basics, I felt as though I was doing everything properly.  Any suggestions as to what I should do in the future / how you execute orders / whether an ARCABuyTier or ARCASellTier would be acceptable to use.

Bella

So when determining an exit you first need to identify the trade.  Was this a scalp trade?  Was this an intraday swing trade?  Now more specific.  Was this a scalp trade with the Gold futures as a leading indicator?  Was this a swing trade with the Gold futures as a leading indicator?

Allow me to assume that this was a position trend trade where you were trying to catch an intraday trend in Gold.  You noticed a stock that was lagging and decided to get short.  I like this trade very much.

You have a sector that is starting to trend.  You have a stock that has not caught up with the downtrend.  You find an excellent price to enter to catch this trend.  Very nice trade here!

So for me I am not trying to cover where you were.  I am holding this for a bigger move.  NEM or Gold would have to break the intraday downtrend for me to cover.

Now to the specifics of covering.  You must learn how to bid and offer as an active trader.  ECN fees can cost you a paycheck per month if you do not learn this skill.   Also it is just bad trading to pay the offer to get into a stock and hit the bid to exit on every transaction.

A general rule when a stock is trending down is to cover on the bid.  You place a limit order at the price.  When scalping you may want to clip the offer or bid here and there with a sweep key.  But you have to be quicker.  If you were scalping above then your cover is terrible.  You have to clip that offer at 48c and not miss it.  You are young.  Hit the keys faster 🙂

I like you working on this skill.  A good trader can buy on the bid and sell on the offer with precision.

Bella

One Good Trade

no relevant positions