Buying the bid/ Selling the ask

[HaloTrader]

How can someone effectively buy the bid and sell the ask ...
If your buy limit order is 400... You are filled.
NOW you place your short limit order at 401 (@ ask), your last in the que! and probably won't get filled unless the ask goes above 401!

Is my thinking correct? I guess thats the risk you run as a market maker.

 

[HaloTrader]

I just want to know if the trading is the same when you go live. Always good to learn but I dont want to taint what I have learned already with biased sims.

Well its interesting because now through simulators you can specify bad fills, partial fills, to be last in the que... Furthermore now simulators that are free consider the current market depth in calculating how realistically you would get a fill at a certain level with consideration to when you placed the order, type of order and current size...

So to some extent it could be considered quite realistic and also through using partial fills you make it more difficult for yourself, therefore the transition from demo to live is less step.

 

[foredog]

Cheers, very helpful.


If the bid is hitting your buy limit order, thats good enough to get a fill?


NO
Thanks x

Someone has to actually hit the bid. they have to sell on the order board at the bid enough to hit the limits in front of yours and your amount, although you may get a partial fill.

 

[HaloTrader]

Okay thanks.
Another simple question if possible...
This is silly but their is
Wheat futures on CME & Wheat futures on CBOT
Are they the same things?
I understand their is a pit-traded Wheat (W) and an electronic (ZW) wheat... But both of them products are on CBOT...

I think CBOT is owned by CME but can someone just clear this up? Thanks a bunch as always.

 

[arabianights]

How can someone effectively buy the bid and sell the ask ...
If your buy limit order is 400... You are filled.
NOW you place your short limit order at 401 (@ ask), your last in the que! and probably won't get filled unless the ask goes above 401!

Is my thinking correct? I guess thats the risk you run as a market maker.

If you trade like that do not expect to be a market maker for very long

 

[HaloTrader]

If you trade like that do not expect to be a market maker for very long

Can you explain your comments?

Cheers

 

[cr6196]

how is it done then?

 

[arabianights]

Can you explain your comments?

Cheers

The market may never come back

 

[HaloTrader]

The market may never come back

Ha, so how do market makers make money?
And the markets do come back if you pick the right situations...
Par examp
ES (09-09 obvs)

1-minute trendline + roof.
Placed a buy limit order @ 888.75
Filled.
Now a sell limit order @ 892.50
If price gets there i will have gained the spread... Yeah?

 

[HaloTrader]

The market may never come back

Suppose the irony is, that if there is enough bids hit to enter you long, then there is enough supply to push the markets down lol

 

[HaloTrader]

Right the problem still exists lol
Trading the ES through a NinjaTrader simulator.
Offer:401
Bid:400
(For example)
If i have a limit order to buy at 400, i won't actually get filled unless 400 becomes offer ... No matter how long price stays at 400.

? Is it always like that?

 

[cr6196]

Try getting the quick entry buttons up on the dom is easier getting in, but ive found buying the bid ok, can take a bit longer getting filled on es...

 

[HaloTrader]

When you buy the bid... For me, everytime price has to move through it (therefore the bid becomes the offer anyway!)...
:S

 

[new_trader]

Cheers, very helpful.

So basically the quicker you can place a limit-order the likelihood of a better fill.
Basically though, just to confirm, prices don't have to trade through a limit order to execute.
If the bid is hitting your buy limit order, thats good enough to get a fill?

Thanks x

Halo, you are asking questions to which the answers are pretty much academic. You do not use limit orders if you care about speed!

The basic rule of thumb is this:

1) Use Limit orders if you care about fill PRICE.
2) Use Market orders if you care about fill SPEED.

A proficient, skilled trader only enters an order when they are near certain the market will move in their favour immediately, therefore they only trade using Market orders.

 

[tenbobtrader]

New Trader

"A proficient, skilled trader only enters an order when they are near certain the market will move in their favour immediately, therefore they only trade using Market orders."

does that not depend on market traded ?

does the spread not naturally widen at these points (wider than usual for instrument) ?

does a proficent trader not just no where to place the order and amend as per requirement based on price action observation during sesssion in question ?

Andy

 

[arabianights]

Halo, you are asking questions to which the answers are pretty much academic. You do not use limit orders if you care about speed!

The basic rule of thumb is this:

1) Use Limit orders if you care about fill PRICE.
2) Use Market orders if you care about fill SPEED.

A proficient, skilled trader only enters an order when they are near certain the market will move in their favour immediately, therefore they only trade using Market orders.

Hey dumb ****, what if everyone else believes the market is going to move in their favour and you get filled 200 points offside on the S&P?

 

[tenbobtrader]

notice on this thread traders refer to modern platforms with multi function orders on screens etc etc

make sure what your looking at is full info if your short run / scalper trader

ie: not a throttled data feed !

it effects volume / tick and order book if throttled

Ask provider for full info on data to your platform

you would be unaware its not obvious by observation

Andy

 

[new_trader]

New Trader

"A proficient, skilled trader only enters an order when they are near certain the market will move in their favour immediately, therefore they only trade using Market orders."

does that not depend on market traded ?

does the spread not naturally widen at these points (wider than usual for instrument) ?

does a proficent trader not just no where to place the order and amend as per requirement based on price action observation during sesssion in question ?

Andy

I don't know why you think it should depend on the market traded? What makes you think that the ES would work differently to the YM for example?

There is a difference between knowing where to place an order and when! Hit-and-miss traders like to use limit orders because it makes them feel as if they are doing something even when they really ought to be doing nothing until they are sure because that is the correct thing to do.

There is NO ADVANTAGE gained by having a limit order sitting in the market and amending it. This is guessing. You commit when you are near certain that it is the right time to act or you do nothing.

 

[new_trader]

Hey dumb ****, what if everyone else believes the market is going to move in their favour and you get filled 200 points offside on the S&P?

I've been trading the ES for around 4 years now plus I've got most of the historical data available for it since it was launched. I put faith in my judgement rather than your idiotic hypothetical. What if you just keep your mouth shut and stop adding zilch to this conversation.

 

[tenbobtrader]

new trader

thanks for answer

"I don't know why you think it should depend on the market traded? What makes you think that the ES would work differently to the YM for example?"

do not think it works differently newtrader

"does the spread not naturally widen at these points (wider than usual for instrument) ?"

just observed this is more often the case at levels of interest


perhaps my levels of interest require adjustment


Andy