I agree with your Q & A response on limit orders because I have also received poor treatment by the Floor Traders on market orders. However, last night (Dec 4) I put in all limit orders at or slightly above the previous closing prices on several stocks. Needless to say I did not execute any trades. All of my limit orders were below the lowest price of the day, so. I knew the market would gap up but I still don't like to use market orders. Is there anyway you can determine where those first trades are going to transact or should you just put in a market order so you don't miss the day like I did today? Or should I just get up at 6:30AM and watch the tape? (December 5, 2001)
With gaps higher it is a tough one. You hate to jump in on the gap up, but if you cannot watch the moves, how do you determine the best time to get in? When using a real time service you can look before the open and see where Nasdaq and some other stocks are trading, and you can adjust any order to that point. If you use a 'live' broker, he or she can tell you where stocks are indicating at the open. Market orders are so tough because you often get close to the high right before the pullback and are trying to make up the difference on the session. If it is a breakout from a good pattern and we are planning on holding long term, we don't care as much. On option plays, we care a lot more. On powerful days such as today your best choices are (1) figure out the trading prices from your broker in the morning and put in an order there; (2) put in a buy stop order ahead of the price, (3) get an alert on the first pullback. With option 2 you can put in that order ahead of the price and it is triggered if the stock hits it. You can also put in a limit order and let the stock come back to you after it has gapped higher.
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