In the case of many endeavors, entry is available to all. Yet, mere participation is scarcely all that is given by those that excel. Often it is an enthusiastic eye toward common practices that uncover ways to enhance performance.
Regarding perennial top-producers, often it’s these frequent, perhaps small profits that contribute to such results. As we face the challenges and opportunities of day-trading the e-mini S&P, one commonality we share is frequent entries and exits and the order types available which facilitate these.
Might we raise our earnings by using those available more advantageously? Let’s begin minding our orders by itemizing each variety, and then consider two specific ways to raise our earnings through this common aspect of our operation.
Order-Types:
• Market- Used when entry is top priority. If buying your fill will be the bid and when selling the ask. Hence, upon fill your position is typically -$12.50 (one-tick in the e-mini S&P).
• Stop- Used to limit the amount of risk you choose to bear. A stop-order becomes a market order once it’s price has been touched.
• Limit- Used when specific price of an entry or exit is top priority. To guarantee fill the market must surpass price of order.
Two Ways to Profit:
The first way involves our use of these in small-range market conditions. Here, the distance between our entry and exit areas is relatively small. Additionally, the number of trades at these areas may be few before price contracts back into it’s diminished range. Easily, the use of limit-orders could result in missed fills. Meaning that we either miss the trade altogether or our exit order is not able, and profits are not realized. Since price volatility is lower, we may opt for a slightly less favorable fill in lieu of opportunity participation. That way if we see what is for us a viable trade opportunity we can be a part of it. Further, for those we are a part of, we can earn most of what we came for by exiting at the market.
Now let’s look at what minding your orders means in a fast market. Have you ever waited to enter in a certain price area, clicked to enter at the market and received a fill beyond your initial profit-target? You exercised patience yet no reward, likely a loss which is a frustrating and urgent problem! By using limit orders in a fast market, entry into or exit out of our intended area is assured.
In either case, may we remember the opportunity that lies within our frequent orders. That adapting order-type to market conditions is the essence of minding our orders and that doing so can raise our earnings.
© Copyright 2008 by Trading Concepts, Inc.
