Types of Orders & Placing Orders

Transcription

1 Types of Orders & Placing Orders

2 Types of Orders Trading Concepts, Inc. 2

3 Types of Orders The E-Minis (ES, YM, and NQ) are traded electronically on the Chicago Mercantile Exchange s (CME) Globex trading platform. This provides traders with electronic access to the equity index marketplace virtually 24 hours a day from almost anywhere in the world. Trades on CME Globex are executed in less than the blink of an eye and instantly confirmed back to the trader. Individual traders, small businesses, and large institutions alike can see and have access to the same prices. Trading Concepts, Inc. 3

4 Types of Trading Orders typically used for Day Trading MARKET (Entry) Orders are orders to BUY or SELL the market at the current market price. LIMIT Orders are orders where you are specifying a certain price to BUY or SELL the market. STOP Orders specify a price at which an order is to be executed and become MARKET orders when trading occurs at or through your specified price. MARKET IF TOUCHED (MIT) Orders are conditional orders which become MARKET orders when the market reaches a specified price. Trading Concepts, Inc. 4

5 With certain caveats, you are guaranteed a FILL if the market trades through the price. If the market merely touches your price, you are NOT guaranteed a fill using a LIMIT Order. A BUY LIMIT order is placed below the current market price and is the highest price a trader is willing to pay. A SELL LIMIT order is placed above the current market price and is the lowest price the seller is willing to pay. Trading Concepts, Inc. 5

6 STOP Orders may be used in the following manner: To establish a New Position: A BUY STOP may be placed above RESISTANCE to initiate a LONG trade. A SELL STOP may be placed below SUPPORT to initiate a SHORT trade. To Limit a Loss on an Existing Position: If LONG, a SELL STOP below current price may be used to limit any losses. If SHORT, a BUY STOP above current price may be used to limit any losses. To Protect Profits in an Existing Position: If LONG, when the market moves higher, you want to RAISE your SELL STOP in order to Protect Profits; this is called a Trailing Stop. If SHORT, when the market moves lower, you want to LOWER your BUY STOP in order to Protect Profits; this is called a Trailing Stop. Trading Concepts, Inc. 6

7 Since STOP Orders become MARKET Orders once touched, your FILL price may be beyond your STOP order price especially in volatile (fast moving) markets. Trading Concepts, Inc. 7

8 With MARKET-IF-TOUCHED Orders, you are guaranteed a FILL if the market touches the price. You may experience slippage in the amount of the bid/ask spread; however, you are guaranteed a FILL. A SELL MARKET-IF-TOUCHED order is placed above the current market price and is guaranteed a FILL if the market moves higher and just touches the specified price. A BUY MARKET-IF-TOUCHED order is placed below the current market price and is guaranteed a FILL if the market moves lower and just touches the specified price. Trading Concepts, Inc. 8

9 Types of Trading Orders typically used for Swing Trading Time Conditional Orders are orders to BUY or SELL the market with a TIME limit set by you, the trader. Time conditional orders are typically referred to in the trading industry as: Day Order. An order that remains open until filled, until cancelled by the trader, or until the market closes. Good Till Cancelled (GTC) Order. An order that remains open until filled or cancelled by the trader. Trading Concepts, Inc. 9

10 Placing Orders Trading Concepts, Inc. 10

11 BUYING LONG on a Breakout BUYING LONG on a Retracement Trading Concepts, Inc. 11

12 BUY STOP above Current Market Price BUY STOP Current Market Price LONG Entry: Use a STOP to BUY on a Breakout SHORT Trade: Use a STOP for your Initial Stop Loss and Trailing Stop Trading Concepts, Inc. 12

13 BUY LIMIT below Current Market Price Current Market Price BUY LIMIT LONG Entry: Use a BUY LIMIT to BUY on a Retracement SHORT Trade: Use a BUY LIMIT for Profit Objectives Trading Concepts, Inc. 13

14 SELLING SHORT on a Breakout SELLING SHORT on a Retracement Trading Concepts, Inc. 14

15 SELL STOP below Current Market Price Current Market Price SELL STOP SHORT Entry: Use a STOP to SELL on a Breakout LONG Trade: Use a STOP for your Initial Stop Loss and Trailing Stop Trading Concepts, Inc. 15

16 SELL LIMIT above Current Market Price SELL LIMIT Current Market Price SHORT Entry: Use a SELL LIMIT to SELL on a Retracement LONG Trade: Use a SELL LIMIT for Profit Objectives Trading Concepts, Inc. 16

17 Legal Disclaimer No claim is made by Trading Concepts, Inc. that the trading strategies shown here will result in profits and will not result in losses. Trading may not be suitable for all recipients of this Training Program. All comments, trading strategies, techniques, concepts and methods shown within our Course are not and should not be construed as an offer to buy or sell stocks, ETFs, futures, foreign currencies, and/or options they are opinions based on market observation and years of experience. Therefore, the thoughts expressed are not guaranteed to produce profits in any way. All opinions are subject to change without notice. Each trader/investor is responsible for his/her own actions, if any. Your purchase of the Trading Concepts EMINI SUCCESS FORMULA Start-Up Edition constitutes your agreement to this disclaimer and exempts Trading Concepts, Inc. from any liability or litigation. Trading Concepts, Inc. 17

18 All rights reserved. This Training Program, or parts thereof, may not be reproduced in any form without the prior written permission of Trading Concepts, Inc. Trading Concepts, Inc. 18