I have a question for the elite day traders here. If you are using IBKR as a day trader, what is your preferred order type on IBKR for day trading futures? I did some testing on IBKR Paper Trading. When I submit a limit order using a lousy price to ensure I get a fill, the price filled was horrendous. The filled price did not even exist in the real orderbook. When I use a market order on Paper Trading, the filled price was better. It seems like it's a bug with IBKR paper trading. In actual practice, is market order or limit order using lousy price better for ensuring that an order gets through? Can the elite day traders here advise? Thank you.
It be more realistic to use Ninjatrader for demo your way of trading. As far as manual trading, I use to scalp for 1-3 ticks in ES and 8-9 ticks on crude oil, always placed my exits first into the que then wait for signal and hit bid or offer. LOL, In ES there were times my exit was hit first and then put in limit for exit. Took my good 7 years to get consistent scalping and another seven years to become good. I wouldn't advise anyone to tackle intraday trading any more, really tough to Master. I lost $106,000 before turning it around and 7 years. Swing trading or very long term commodity trading or learn selling credit spreads can be profitable by studying and backtesting. What many don't understand is loss of time, so much time lost cause trader staring at screens when you can get a job you like to do, have a family, go on vacations... I gave all that up to work at becoming best that I could in trading. Now iny mid 60's, all is automated, going to get married, buy different house.
So I need to be an "elite day trader" to post a reply? Whatever. Anyway, your question largely depends on couple factors. First, does the instrument you trade have enough liquidity, namely is the spread between bid and ask thin or wide? If you trade thinly traded stocks with a wide spread, you probably don't want to use a market order. Second, what is your trading style? If you're a scalper who needs to move in and out of trades quickly, limit order would be the last thing you'll want to use. Personally, when I'm not using MIT orders, I like using IBKR's Adaptive Algo orders: https://www.interactivebrokers.com/en/index.php?f=19091
I do day trading. Most of the time, I use market orders. also, elderly folks like me have a problem looking at very numerous digits (eg NQ - 7 characters!!!! JPY futures - 9 characters !!!!!!! ). When I have decided to enter a trade, I want to be sure I am in the trade. limit order is slower than market order by a few seconds; you have to check the number, click here and there. those few seconds of decay can cause you a few hundred dollars lost in trading opportunity. so use the one-click function market order.
Another non-elite answer: IB Paper orders are "top of book". That means when you place an LMT order to, say, buy at the ask, you jump to the first in line. In reality, you would be last in line. Same with the bid. So just use LMT that is 1 tick past what you are trying to fill at. That is pretty accurate, all things being equal. Or don't assume any fill unless it goes through your price. From IB: Although the paper trading account simulates most aspects of a production TWS account, you may encounter some differences due to its construction as a simulator with no execution or clearing abilities. These differences include but are not limited to: No support for some order types including: Passive Relative, Auction, RFQ, Pegged to Market and Market with Protection (for futures directed to Globex). Fills are simulated from the top of the book; no deep book access. Stops and other complex order types are always simulated in paper trading; this may result in slightly different behavior from a TWS production account. .... More here: https://ibkr.info/article/252
With all due respect, this is totally false. When you place a LMT order on IB paper trading environment, your order is placed at the end of the queue, and stays at the end of the queue until it gets filled. So the condition is worst than in a real trading environment, cause in a real trading environment, your LMT order is placed at the end of the queue when received, but it advances toward the front of the queue as other LMT orders are received.
Thanks for all the replies from the elite traders here. I'm totally new to day trading, so I regard everyone who replied here as an elite trader because you are better than me. It seems that market order is the right order for a day trader, provided the thing being traded is liquid enough to absorb the market order. For small retail traders like me, it's not an issue.
No knowledge and willing to learn is much better than having a little knowledge and thinking you are an expert.
Isn't that something that is software-dependent? Does TWS not have the ability for that to be selected? For example, using NT7 you can enforce a top-of-book fill with the following option... By leaving the check-box empty, the NT7 sim engine will try to match realistic market conditions at the time of execution.