market or limit orders for fast moves after the opening bell?

[brynno]

i only post occasionally, usually when i'm in a real fix such as now

I’ve recently been brought down to earth using IB papertrading as I’ve realised that market orders can NOT be used just as a stock is about to fall/rise very fast, because by the time they’re executed the whole thing is usually over. On the other hand, if I use a limit order I rarely get filled at all. This morning for instance I tried to enter AMMD with a market order at about 18.20.. a full 2 minutes later I was still waiting, and the stock was around 18.40, just around about where I was supposed to be getting out! (is this normal? Please tell me it isn’t!) Unbelievably frustrating of course, as my “system” tells me with pretty good reliability when and where these moves are going to occur, but since they are mostly within 30 minutes of the open when the market is at its most chaotic, and often only take a few seconds, I appear to have essentially no chance of profiting from them in practice.

So do you use market or limit orders? or what?

Do you accept that it’s not possible to take advantage of sudden moves of, say, 1% in 30 seconds, and instead aim for entries that are setting themselves up slowly enough to give you time to get in?

Or could it simply be that IB’s fills are a lot faster in real accounts than papertrading accounts?

somebody please put my mind at rest as I’m starting to think that I’ve wasted the last 2 years preparing in theory to do something that’s impossible in practice

thanks in advance,

bryn.

 

[DionysusToast]

Brynno - in the first 1 minute, there's a whole load of orders stacked up that are getting processed. Don't think that all that activity is people somehow getting in first on orders they send to the market after 9:30:00. There's a lot of orders 'stacked up' to fire at the open. Give the market a couple of minutes to catch up with this.

It can easily take 20 or 30 seconds to get a fill on a market order you put in at 9:30:00.

Now - from 9:35 to 10:00 you should have no problems at all with market or limit orders. You can of course, also limit orders in the pre-market session (8:00-9:30).

 

[brynno]

Right. that's good to hear. And somebody has since assured me that my "paper trading" orders will take a lot longer to fill than normal as I'm obviously at the end of the priority line.
thanks

 

[DionysusToast]

Paper trades take longer to fill than regular trades ?

Not in my experience but that would depend on the platform.

My presumption would be that paper trades would be executed much faster than real trades.

 

[Trader333]

Trading the market open can be extremely risky and I would urge caution and very low size when you first do it for real.


Paul

 

[brynno]

Paul, I agree but only because orders cannot be filled instantaneously. I mean i'm very comfortable "trading" the open when i'm literally doing it on paper and assuming that i can get in and out exactly when i want. not the first few seconds, mind you. from about 30 seconds onwards. Unfortunately I'm so reliant on the opening few minutes that if real orders take as long to fill as my papertrading orders are taking, i might have to scrap my plans completely after a lot of hard work. This issue really is the only thing holding me back now so it's unbelievably frustrating. There's no point in me going ahead with a very small amount of real money to see how that works, because very small orders go will of course go through almost instantaneously in any case. is there nobody here that's in a similar position to me: you'd like to catch big early morning moves but if you push the button at the start of the move you end up getting filled after the move's all over? One possible idea that i do have is to use IOC "immediate or cancelled" orders whereby you're only filled for as many shares as can go through immediately. Anybody have any experience with this type of order, especially with interactive brokers? thanks!

 

[DionysusToast]

real orders take longer to fill than paper trade orders

 

[pmccandless]

Papertrading is not putting any order in the "real" market for someone else to buy/sell from you. In other words, when you're using a demo account and you put a limit buy order in the ES at 1100, depending on the platform it will automatically get "fake filled" either at 1100 or 1100.25 (for the sake of making it difficult to enter) just because it's ASSUMING you would get filled at that price if you actually were trading live. Thats obvsiouly a major downside to trading a demo account because it's not always the case. And with market orders, demo accounts normally fill you right away at whatever price is at, but in real life you might get filled far from where you intended to enter.

Basically what I'm trying to say to answer your question is that there is no other market participant needed on the other side of your order for your order to be filled.

 

[pmccandless]

wow i just realized this thread is really old... oops