Beginner: market vs. limit

[Guest]

Hello and thanks in advance;

I am not ready for level 2 and I have a quick question. I need to execute trades very early in the morning (as the best time to trade is the 1st hour - we all know that...) I find myself struggling to chase a stock that is moving too fast and me having to go through 3 screens before the order is submitted.

I wonder if market orders (placed before the opening) would give me any advantage.

Alternatively, if the answers is no; then what's the best way to execute a limit order in a timely manner?

Finally, where do you find "reliable" pre-market data? I.e.: I will need to know if a stock will open higher/lower...


Thanks/regards

[stenzrob]

DO NOT PLACE A MARKET ORDER BEFORE THE OPEN.

IMHO, more often than not, you will be bent over by the MM's and regret it.

I messed around with Level 2 for a while, and found it to be of little use.

The only thing I use now for daytrading fast moving stocks is a streamer from ETrade that shows bid/ask price and quantity in realtime. For most stocks, this is pretty accurate for pre-open and post-close as well.

[riverbabe]

Hello and thanks in advance;

I am not ready for level 2 and I have a quick question. I need to execute trades very early in the morning (as the best time to trade is the 1st hour - we all know that...) I find myself struggling to chase a stock that is moving too fast and me having to go through 3 screens before the order is submitted.

I wonder if market orders (placed before the opening) would give me any advantage.

Alternatively, if the answers is no; then what's the best way to execute a limit order in a timely manner?

Finally, where do you find "reliable" pre-market data? I.e.: I will need to know if a stock will open higher/lower...


Thanks/regards

Netez, there is almost no reason to ever place a "market" order. Use limit orders. Check out www.nasdaq.com. You can get premarket trading prices on particular stocks. Also check out the "futures" based on European & Asian markets, that give an idea of where the dow, nasdaq, S&P etc. stocks might open in the U.S. These are available for free in a number of places, including finance.yahoo.com and thestreet.com. If you are buying and the futures are predicted as "up", absolutely do not place a limit buy for the first 1/2 hour of trading because the market makers will grab it and you will get too high a price. However, based on a potential high futures opening, this might be a good time to place a limit order to sell on a potential gap up. If you are buying, wait until 10AM at least to place a limit order, if you can.

If the futures are predicted as "down" and you are selling, place a high sell limit order that might fill during the day. If you are buying, place a low limit order that might fill during the day or on a gap down.

The following link will give you an idea of Reversal Periods trends at various times during the day. http://www.marketgems.com/reversal_period_trading.htm

Riverbabe

[netez]

Thanks

Good info, thanks!

[stenzrob]

Netez, I was going to wait until tomorrow to get back to you on this, but then it occurred to me that tomorrow is today.

[netez]

Hahaha

Hahaha, LOL; that's absolutely right!

There is no tomorrow, there is not yesterday, there is only now

[IIC]

Hello and thanks in advance;

I am not ready for level 2 and I have a quick question. I need to execute trades very early in the morning (as the best time to trade is the 1st hour - we all know that...) I find myself struggling to chase a stock that is moving too fast and me having to go through 3 screens before the order is submitted.

I wonder if market orders (placed before the opening) would give me any advantage.

Alternatively, if the answers is no; then what's the best way to execute a limit order in a timely manner?

Finally, where do you find "reliable" pre-market data? I.e.: I will need to know if a stock will open higher/lower...


Thanks/regards

What are you trying to accomplish???...I really cannot answer w/o knowing that.

Also...Who said the first hour is the best to trade?

[netez]

Into action

Thanks for your message;

I am trying to get into action (i.e.: buy the stock) within the 1st 1/2 hour of trading buy I always find myself to chase the stock that often moves higher at a very fast pace and in the end doesn't make it worthwile persuing (too late...).

Hope that makes sense

[billyjoe]

netez,
Set a limit on how far you are willing to chase it and don't go past that point. If your chosen stock gaps down that may be a good reason to avoid it also.

-------------billyjoe

[netez]

OK I'll try

OK I'll try

[IIC]

First of all...you want to find pre-m movers that will gap up.

There are tons of places to find pre-m movers...You can look at the top 10 movers at http://Nasdaq.com Check out the pre-m movers at http://www.knighttrader.blogspot.com/ (Although he posts them early...yesterday over an hour before the market opened as you can see...so there can be a lot of changes before the market opens.) You can go here pre-m for free http://www.realtimetraders.com/cust/...stk_alerts.asp
or you could look at the after hours action at MW...place the hi vol movers in your streamer the night before and see which ones are moving in the morning(this also gives you some time the night before to check out WHY they moved a/h) The site is only available a/h...you will not get any info during market hours at http://www.marketwatch.com/tools/sto...sp?siteid=mktw ...You can change the sort by clicking % or whatever at the top of the list.

You can also go to this site the night before and add all the stocks that announce a/h the day before and the ones that will announce pre-m the next day...Watch to see which ones move pre-m http://www.rightline.net/calendar/index.html

There are plenty of other places but if you do the above you'll usually end up with more than you can watch...especially during earnings season.

Now, if you can wait till the market opens you can check the TOP Movers on many broker sites or for free you can see r/t movers (not a complete list by any means) at Stockcharts Gallery View (I think it updates every 1-3 minutes???...Click refresh) http://stockcharts.com/charts/GalleryView/

Now...you will have plenty to watch.

I'll continue this post a little later...Doug(IIC)

[IIC]

OK...I'm back.

First of all...let's forget market orders at the open...you'll go broke.

On news plays you will get tons of orders at the open which will drive the price up...Once the sharks are through with the amatuers the price of a gapper usually retreats...If it doesn't pull back...then you missed it.

Lets take the KT pre-m movers yesterday:

DV,PANC,ATSI,CFC,MSFT,RDN,SWIR,WFR,DRIV,MTG

If you had bot at the open and held all day you would have ended up with 5 gainers and 5 losers.

If you had put a 5% stop on right after your purchase you would have had 3 gainers and 7 losers.

Obviously, one day is not tell all...but go back and check as many days as you wish...I see it happen all the time.

Here is what I would suggest...Wait 20-25 mins which will give you plenty of time to see what's moving...wait to see which ones have pulled back and bounced off of what you consider support ( although some take longer than you have to do so)...Can't tell you at what price you might consider a buy but you probably have a better chance of making money in the long run if you are not so eager to jump into a gapper or early mover.

Since you have to leave so early you may want to determine at what price you actually want the stock.

As an example, let's say a stock gaps up and pulls back during or after the first 20-25 mins. The high price during that 20-25 mins could be considered an early intraday resistance level.

Since you have to go you might consider placing a Buy Stop or Buy Stop Limit Order on any you might be interested in.

Here are some examples on 5 min. charts from yesterday.

But remember...Your Buy Stop could get and filled and later the stock tanks. Also w/ Buy Stops you can't trade volume either.









The above is not a sure-fire way to trade...Otherwise I'd only trade that way myself...But hopefully it gives you a little food for thought...In fact, you should download this, print it out and read it...Should give you some useful tips or ideas:

Trading The 10 O'Clock Bulls

Just in case you don't know what a BUY STOP or BUY STOP LIMIT is:

http://www.tradersnotebook.com/orders.html

Good Luck...Doug(IIC)