A sorely neglected aspect on the blogsphere has been order entry. I’ll go through what I do as far as day trading goes and you can take whatever applies to your situation.
Check out the picture of my market maker box. There is information on price, spread, volume, high, low in the top box. Below that is a horizontal multi coloured bar that displays bid ask spread and quantity. It moves right or left depending on the spread/volume. To the right there is a ticker that shows price and volume of the ongoing trades.
Bid/ask price levels are shown in 5 tiers with different colours in the middle of the box.
Below that is where the order are input. Symbol, volume, type of order, stop price, route.
Volume is set at 1000 shares and spins up in 100 share increments when I click on it. Order type is set on market. If I click on any bid ask tier, that price appears as my order price and also changes the default market type order to a limit order.
Route is set to ARCA for NYSE and the ETFs stocks and NSDQ for Nasdaq stocks. Buy, Cancel, Sell, Short buttons are colour coded.
Now when the time is right to place an order it’s always a balancing act as to whether go market or limit order. If I have time I will go limit. If I sense things are about to move fast or are jumping around I will put in a market order. In these days of .01 spreads it is easy just to do market orders all day long. Sure it costs more in fees than limit but I am not left chasing a higher price and missing my opportunity. The penny saved is not worth the dollars lost or the emotional turmoil you can be left with seeing your opportunity fly away from you. I believe when the time is right it is best to act- the momentum will do work for you.
Another important detail is to not screw up your order types. If you have ever put a buy order in when you really wanted to put a short order in you’ll know what I mean. I was trading RIMM a few years ago getting ready to sell the long and go short. I mistakenly bought another chunk of it in a pile driving market. Believe me, the next few moments were exciting, discovering what went wrong and then trying to sell a bunch of stock when the price was going in the toilet.
Order entry is one of those sublime things that is very important yet stays on the fringes of trading. Learning how to do it takes time and the experience of recognizing past mistakes.
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