Entering to the tick

Discussion in 'Order Execution' started by tradingkevin, Jan 21, 2009.

  1. Hi Guys,

    I need your help...

    I have a strategy Support and resistance strategy were I want to enter at the exact price but not sure what the best type of order would be ... limit, Market if touched, buying the bid,?


    I want to go long on a pullback. The market is trading at 110 and I want to go long exactly at 100.

    THE QUESION : What is the best way to get me in at that price without missing out on the trade and getting filled at exactly 100 ?
  2. Euler


    Why not plain limit? I think it's the only way you get first in line (or nearly first in line) for your price of 100.
  3. Limit Order Definition:
    An order to execute a transaction at a specified price (the limit) or better. A limit order to buy would be at the limit or lower, and a limit order to sell would be at the limit or higher.

    Eventhough the definition says that it will execute the order 'at a specified price or better ' , I notice that to be sure to even get filled, the market has to trade through your price by at least one tick .i.e. in this example, the price would need to go to 99 before the limit takes affect. If price would bounce exactly on the 100, the LIMIT would not even take place... so you would miss a potential great trade all together ( which is sometimes is more frustating than a loss for my part : )

    So you are right Euler, Limit would be the wisest choice but the issue above is the one I am dealing with...

    Any suggestions, ideas,comments to deal with that issue ??
  4. Euler


    Under "normal" circumstances, your order will of 100 should be hit before any quoted bid of 99.99, as per reg NMS. Unless it's some anachronistic, non-reg-NMS market where market makers/floor traders have some absurdly favorable privileges. (This may not apply at the open or close due to large numbers of "market on" orders at a particular exchange; I'm not sure about these cases -- maybe someone else could chime in.)

    It's possible others will get filled at 100 before you, if they either entered their order earlier, or if it trades at a different exchange and someone routes to the different exchange instead. There is no way around this, aside from entering a limit price at 100.01, in which case the same situation applies but at a price a little worse than before, etc.
  5. Does this rule applies with the futures market as well ?