I'm reexaming the way I enter my trades in the ES and wonder how most successful traders enter their trades. I've always used limit orders for trade entry because I've been burnt trying to chase the market. However, I'm re-thinking if using market orders might provide better results. My thought is that by using limit orders I am not filled on markets that run away from my limit but I DO receive a fill on EVERY trade that turns into a loser. What do you think? Limit Order entry Market Order entry or Stop Order entry
Paul Mozer the top treasury trader at Salomon Brothers (and the one that went down in scandal in 1991) said once that when he got horrible execution it frequently resulted in a great trade. I think if you are a momentum player frequently you need to pay up to be in the trade.
I only enter on buy/sell stops. 1) Guaranteed to get filled on all winners. 2) Guaranteed to not get filled on some losers. I'd much rather it be this way versus the other way around.
It depends on what your frequency of trading is and how important slippage is to you. 1 and 2 ticks of slippage on each side of the trade can add up to plenty at the end of the year. I would rather use market orders in ES because the the spread is so tight and you are bound to be one of the last in line in the queue no matter how long you have your limit order working during the day. For other markets, limit orders are a must, and I wouldn't consider using a market order in thinner markets unless I enjoy getting robbed. In ES, you are fine using market orders for entry. I've started using stop limit orders for exit just to save a tick here and there. It adds up...