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> 99% of all orders of a professional trader should be LMT (versus MKT.) There
> are reasons to use MKT orders, but all the ones that come to mind are in
> "advanced" strategies.
>
> Ivan
quite the opposite. most of the pros i know go market...or hit the bid and take offers ( active limit )
reason is simple: don't try to screw with the specialist or don't try to play a market makers game...
other reason is:
- orders are divided into passive ( contingency ) and active ( immediate )
passive order are limit orders and active orders are market orders.
passive orders are where you wait for someone to take your offer or hit your bid.
active orders are orders where you are the one whos taking the offer or hitting the bid...
statistics show that passive orders get executes less than 20-30% of all passive orders,
the rest go unexecuted...
about 70%-80% of active orders are on the opposite get executed and only 20-30%
stay unfilled...
since ***execution is always a priority over ***price, you need to stay proactive vs passive, need i say more.
market makers and specialist deliver execution to you at a premium called spread...
the nature of their game is different compared to yours...for them price is a priority, for you
execution is a priority...
other consideration is that the market order traditionally was a SNET broadcast order,
not anymore, now at market order can be proactive "search best price" routing order
based actually on limit order or/and market order...
limit orders can be used successfully as profit target orders...but you still must be careful...
executions are EVERYTHING in the market... in fact if markets were 100% liquid ( instantaneous
unlimited execution at best price ) we would not need any fancy trading systems...
trading game is mainly a *competition for execution and liquidity...timing of market is of secondary consideration.
the reason paper trading or simulators do not work is because they assume 100% liquidity.
in reality liquidity wildly fluctuates from 0 to sometimes 100 and most of time hangs in between...
bilo.
> ----- Original Message -----
> From: "Ian McVicar" <icm63@xxxxxxxxxxx>
> To: "OmegaList" <omega-list@xxxxxxxxxx>; "QCharts" <qcharts@xxxxxxxxxxxxxxx>
> Sent: Monday, March 18, 2002 11:48 PM
> Subject: Interactive Brokers Stock MKT or LMT orders ????
>
>
> > Sorry if topic is off user group subject matter.
> >
> > But...
> >
> > I am just about commence trading stocks on NYSE and NAS with IB. There
> > execution is 2 sec or so.
> >
> > If you are an equity trader what order type do you advise with IB, MKT or
> LMT,
> > any advice would be great ?
> >
> > Thx in advance.
> >
> > Ian
> >
> >
>
>
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