Market if Touched Trigger method

Discussion in 'Trading' started by jmdeacon, Sep 8, 2011.

  1. jmdeacon


    I would like some opinions on different trigger methods for market if touched orders trading stocks. I use interactive brokers. When a market if touched order is placed, the trigger method can be set to be Last, Double last, Bid or Ask, or Double Bid or Ask. The IB default is set to be Double Bid for Sell orders and Double Ask for Buy orders. I have been trying out MIT orders since I end up missing entries and exits with limit orders, probably about 10% of the time. And of course, it seems that some of the best trades ended up not making much because I may only get a small fill when a stock only trades down to my limit order, just barely.

    To address this trade slippage, I tried out the MIT order with the default IB trigger method. Most of the trades ended up being pretty close to the limit price, with a couple even being filled at a better price, but a couple of my sell limits did not get trigger despite trading through the price briefly because the double Bid did not occur. I think they would have exited with limit orders, or at least most of the position would have exited. I switched some orders to have a trigger method of "Last", and on the one that has triggered since I made that change, the execution slipped a full 2% on a sell order. I still exited with a profit, but that is a lot of slippage.

    I understand the benefits and risks to both the limit and MIT order. I know the limit order guarantees my price but I could miss out on some great trades if they reverse right at that price. The MIT guarantees I get the trade, but the price slippage might be huge. Ultimately I suspect only my experience of seeing whether the price slippage or the trade slippage is worse will help me decide which to go with.

    However, I am curious to see if any one has experience using the various trigger methods of Last, Double Last, Bid/Ask, and Double Bid/Ask.