Day Trading Order Types
TYPES OF ORDER AND HOW TO PLACE THEM PROPERLY:
When placing and order with your broker, placing it properly is the first step to assure that you are doing what you are intending to do. Our recommended brokers will assist our costumers until they are comfortable and confident to place their own orders by their selves. If you are an experience trader you choose between varieties of platforms to place your own trades.
When you place your order verbally, your broker will repeat the order back to you and if needed assist you with any question that you have about the impact of it. You should never feel uncomfortable and not sure that your broker did not understand your order properly. After he has repeated the order to you, he is going to give an order number so you can identified your order for a further confirmation or cancellation, write this number so you can keep a record of your trades. Remember that all of your instructions to the broker are recorded this is in your benefit. For those choosing a discount service you have to be sure that you understand correctly how to use your trading platform and the different types of orders. If you ever have a question about any types of order , feel free to contact us or your broker and happily we will assist you. Remember that all the orders are considered day orders and will expire at the end of the session.
MARKET ORDER
A market order does not specify a price, it is executed immediately at the best possible price available. This order is used to enter a new position or to exit an existing position.
Example: My account number is 1234567 and I want to buy one of the march EMINI S&P at market (this is to go "long", you can also sell to go "short".
LIMIT ORDER
The limit order is an order to buy or sell at a designated price or better. Limit orders to buy are placed bellow or at the current price while limit orders to sell are placed above or at the current price. This order is used to enter a new position or to exit an existing one. Even though you may see the market traded your limit price several times, this does not guarantee a fill at that price, the reason is that on a Limit Order you are only guaranteed to be executed if the market trades through the Limit price.
Example: My account number is 1234567 and I want to buy one march EMINI S&P at 1480.50 or better.
STOP ORDER
Stop orders are used for various purposes, to initiate a new long or short trade, to protect a profit on an existing long or short position or to minimize a loss on a short or long position. This order becomes a "market order" when the specific price is reached and does not guarantee that you are going to get in at your exact price, why? Because it becomes a market order. A "buy stop order" is placed above the current market and is elected only when the market trade at or above, or is bid at or above the stop price. A "sell stop order" is placed bellow the current market price and is elected only when the market trade at or bellow, or is offered at or bellow the stop price.
Example: You call your broker and you say my account number is 1234567 and I want to sell one EMINI S&P at 1493.00 on a stop, at that moment the market should be trading above your stop price.
STOP LIMIT ORDER
The STOP LIMIT order contains two prices and gives you more control at the price that your stop order may get fill. The first part of it is placed as a regular Stop Order and the second part limits the maximum price where you don’t wish to be filled beyond this Limit price.
Example: For account number 1234567 I want to buy one EMINI S&P at 1495.00 on a stop and limit 1497.50. In a fast market can occur that after trading beyond 1495.00 the next trading price is above 1497.50 where you not want to get filled.
MARKET ON OPENNING (MOO)
As it indicates, this order is placed before the market opens and where the costumer wishes to be executed at the best price within the opening range.
MARKET ON CLOSE (MOC)
This is an order that will be executed at the best available price during the last minutes of the trading session.
MARKET IF TOUCHED (MIT)
This order is similar to a stop order in that is executed only if the price reached a specified level, and them it becomes a market order. The difference between the Stop Order and the MIT order is that an order to sell is placed above the current level, and to but bellow the current level. Not all the exchanges accept MIT orders, please consult with your broker before placing this type of order.
Placing your orders in the correct way will enable you to save time and commit errors that can cost you money. When I have found myself that I committed and error in placing an order I usually close the position immediately. If you have any question about the way to place your orders, call your broker.