New to futures (eminis) from equity side. Interested in knowing whether majority of emini traders use market or limit orders, as well as pros and cons of each. Thanks.
I use market and stops. Rarely ever a limit. Limit can only mean one thing -- either I am entering against the market or cutting my exit short. The liquidity is good enough for market. At least for my whopping size of one contract.
For a while there, if you put in a market order in the emini, the bid-offer would suddenly shift to ding you .25 from what was showing. Then it would shift back after you got your bad fill. This happened to me about 90% of the time on about 40-50 trades, so I know it wasn't a fluke. Then I switched to limit only orders and was filled at whatever the bid-offer was showing when I entered my order about 99% of the time. Perhaps it has changed, perhaps the market is more liquid now. Give market orders a shot if you want. If you get slippage, switch to limit orders.
IB simulates GLOBEX market orders as limit orders, so your market order is actually routed to the exchange as a marketable limit order through IB's servers. I don't use market orders for that reason- not GLOBEX native, but more importantly because I want to know what price I'm going to get filled at...especially if the market is jumpy. Then again I try not to trade when the market is too crazy.
a mkt order will usually buy you the ask, but hotkeys can be set up to easily buy the bid, ask or bid minus or ask plus. so mkt orders are kind of obsolete. and as already stated, all mkt orders have to be converted anyway to aggressive limits, so you can just easily do it yourself. I have a close position hotkey set up with a mkt order though, just in case I panic and can't remember if I'm long or short.
Gee... I wish I read that sooner. That's what happened to me when using Auto Trader. I meant to sell, but ended up buying. Noticed that the market was moving against me so to close my position I bought again (thought I sold) and ended up with 2 contracts. The PL was getting even more negative so I bought again in panic (I guess), ending up with 3 open contracts. Added three more in the same way, and finally sold six of them when I realized that the only way to finish this thing out is to do the opposite. Fortunately the last 3 contracts were bought and sold at the same price. The net price -$350 plus comissions. Now I will only be using hot-keys.... A painful lesson, but I guess one has to make one's share of stupid mistakes to learn the ropes. I set my close position at market order too: Ctrl+C.
Yeah, but I've had it go the other way. Especially when I traded spreads, I was always putting more on when I thought I was taking them off. Those were some of my better trades. I think there is a rule somewhere that it's ok to add to a loser or average down if you think you are cutting your losses short.
Someone mentioned market orders are not native. In any electronic exchange, a market order HAS to be a limit order in some shape or form. That is why Globex supports stop limit orders natively but not STOP orders.