What does it mean to enter on X% Limit?

Discussion in 'Order Execution' started by Fooze666, Oct 1, 2020.

  1. Fooze666


    This is my first post here and it's probably a dumb question to most of you, but I need to make sure I'm understanding this term correctly. I've been doing a lot of reading lately and keep seeing this similar terminology but no clear explanation of it.

    What does it mean if someone is talking about a strategy and they say something like "If this condition exists, we enter the next day on a 5% limit"?

    I assume limit means limit order, but what is meant by the 5%? Does this mean to set a limit order at up to +5% of the closing price?

  2. guru


    It means nothing and there is no such term, unless it’s in a context explained by the person using that term.
    qlai likes this.
  3. Fooze666


    Hmm...I'll have to backtrack a little and see if I missed something in what I've been reading then. The way it's written in the book I'm reading, the author just seems to throw it out there like it's a phrase that's regularly used and everyone should understand.

    Thanks for the answer though, I appreciate it.
  4. themickey


    I've never heard that terminology used in stock trading.
    However it could mean a 5% trailing on current price.
    Last edited: Oct 1, 2020
  5. Overnight


    It would help if you typed out the paragraph that sentence is in, so we can get some context.
  6. Fooze666


    The overall context is talking about the testing of a strategy using RSI signals for entries and various exit methods. The basics are that if the RSI is at whatever number, enter a trade on the next day.

    The exact text:

    We looked at all stocks above the 200-day MA from 1995-2007 which had
    closed at a 10-day low, and entered the next day on a 5% limit. We then
    tested various exits. Here are the results.
  7. qlai


    Given above, I agree with your interpretation. Basically they are willing to buy/sell within 5% of the previous close (in case of a gap)
  8. Fooze666


    That's what I was thinking. It was a little bit of insurance to try to get in on the trade if there was a small gap but not go too far.
  9. SteveM


    That sounds very much like a Larry Conners quote.

    He is saying "today made a 10-day low, enter tomorrow on a limit order 5% below today's close." (.95 X today's close)

    I've thoroughly backtested his methods myself, and yes they work.
  10. Fooze666


    Good eye. It was from something written by Larry Conners :)
    #10     Oct 1, 2020