Stock exchange orders (orders)
Transactions carried out by brokers to their customers, obey orders (orders). The simplest is a warrant exchange market (Market Order). This is an order to buy or sell at current prices at the moment ("at the market price"). When you purchase this order means the immediate ad Dealers price (Ask), the sale - the closest bid to buy (Bid).
Let us digress for a moment on the order and specify the following: we already know that at any given time on the market, there are two prices - Bid (Bid) and offer (Ask)."Traders potatoes in the market, easily recognizable by their price tag - it has two prices - one to buy another - for sale." (Out of jokes about traders).
How can you not get confused? At what price display order? How to calculate the profit - loss? Fortunately, it's simple. First, we must remember a simple principle - the transaction is always less profitable for the trader's price. That is, if a trader buys, it is always at a higher price at a price of Ask, if you sell - at a price Bid. The same rule applies when the established orders. Order to buy (regardless of order type) is satisfied when the price of a warrant Ask price and sell order - Price Bid. Second, the trader is not necessary to particularly think about it - today's trading terminals all this is done automatically.
So, the market (market) order. Obviously, the use of such an order the trader opens up wide possibilities for manipulating the broker. A simple analogy - you want to exchange 100 dollars for rubles, but must do so through an intermediary (broker). Then the market order will sound something like this: "buy a $ 100 Dollars for the price, what will happen." In this case, you completely trust the integrity broker. The simplest scheme, which can hold a broker - to fulfill your order at the maximum price, and a counter transaction - at a minimum, putting the difference in your pocket. You do not notice it. That's why experts do not recommend the use of market order under any circumstances. He (market order) is widely used in stock markets and futures, the Forex is used very rarely. Instead it uses its modified version - the "request quote".
Request for quotation used to open a position, although this is not the only way. In this case the trader informs the broker name, currency, he asks for a quotation, and the value of the lot, which he intends to commit a transaction. All this is necessary for the sole reason that I mentioned in my previous article - do not match the price information and broker. The broker, in response, said a couple of prices - Bid and Ask. Broker reports price is not instantaneous, because he needs to check whether the right of a trader to work with a lot, then contact your market - maker and request a quote, to wait for an answer and then indicate the price the trader. On average, it takes a few seconds to half a minute. If more - it is better not to work with a broker or use other orders. Receiving a response to the request (by the way, when the price changes dramatically, the market is unstable, the broker may not give a quotation), the trader must answer - "buy", "sell" or - "nothing" (which means rejection of the open position). After reciting the trader of the words "sell" or "buy" deal is perfect, her agent confirmed the news that bought so much - for so much - that on this - the price. All calls are recorded on tape broker. Somewhat simpler procedure when working through the trading terminal via the Internet, but the essence remains the same. In principle, the trader can ask as many times as a quotation and abandon the transaction, waiting for a better price, but some brokers to limit this right (otherwise, the broker is overloaded with requests and other traders can not get through).
"Request Quotes" - the main and most commonly used command to open a position, but not unique. Consider other tools trader."Limit Order" or "limit order" (not quite the right term, but settled down). Is an indication of the broker to buy at a specified price or lower, or sell at a specified price or better.Many novice traders make the following error: they are considering staging a warrant on the price of open positions. It's just carelessness. You should always consider setting the order for current prices. Confused? Now I will explain with an example. A limit order is always exhibited at a lower price relative to the current market price. That is, if a buy order, then its price should be lower than market prices (cheaper to buy profitable, right?), If for sale - at a higher price. Assume a trader purchased at a price of 1.0150 euros. And the price has dropped to 1.0120. A trader wants to place an order to sell at 1.0140. Since the price of an order above the market price (1.0120), it is - a limit order. A "trader mistaken," looks at the price of open position - 1.0150, and wonders, "limitnik" de for sale should be higher. Now, I hope it is clear what he is wrong?
The last tool - "Stop - an order" (stop - an order). Performs the opposite with respect to the Limit order function. It aims to buy more of the listed value, or sell cheaply. Price stop orders to buy above the current price set for sale - below. Do not rush to decide that this is a useless and unnecessary tool because of its performance clearly leads to losses. This is the most important tool a trader, it is based on protection against deterioration of prices and thus of large losses (although such protection is like a lizard, break off their tail, or a wolf bite off his paw caught in a trap).
An interesting question - and it always orders "trigger" for a given price? The basis of the same principle - minimizing the benefits to the trader. That is, limitnik triggered exactly at the same price, that it specifies. I had a case where the price jumps jumped limitnik my 120 (!) Points. I also broker (bank, among other things) just opened a position at the order price, and I immediately formed a loss of 120 points. As I have argued that there was no intermediate "ticks" in any information system, the broker was adamant - he was such a price! Fortunately, such cases are very rare, as I can remember one or two cases.
Another thing - stop order. Common phenomenon, when it is triggered you will receive additional paragraphs 1-5 loss. This is called "slippage". If the "slippage" more, or is in a quiet market (where it never should be) - look for other, more honest broker.In recent years there have been variations discussed above orders - orders pending when the order takes effect after the operation of another order; order related, when trigger one cancels the other, etc. The presence or absence of these species allows for the use of complex multi-pass strategy (but I'm not sure about the effectiveness of such .) The essence of the warrants is not changed and that these "hybrids" I will not be considered, especially their work should be checked with your broker.
Occupy a special place orders Take Profit and Stop Loss. This is the usual limit and stop orders, but tied to a specific open position. Take Profit closed position when the projected profit margins, StopLoss also closes the position, but when the expected loss in order to protect the deposit from the further growth of losses. StopLoss - guillotine, cut off part of your money and "thrown out" with your market, catapult, it is always painful, but on the Forex as follows: those who can not chop off a finger - often loses his head (but not always).
And what happens if you try to install the "wrong" order, for example, a limit on the purchase at a higher price? Purely theoretical - it is just going to work at a specified price. It's like that in a market where the price of potatoes 12 rubles per kilo, you shout - "buy at 15 rubles!". Of course, the seller at that price there instantly. But at what price? The question is not simple. If you were a market - maker and would put a price on the market, then, of course, 15. But you are a trader, who works at least through two intermediaries. Therefore, your order is fulfilled to the highest available market price that is 12 rubles! If you are in such a situation will put the stop to sell for 10 rubles - he also immediately granted. Who will buy it for 10 if the price is now 12! But it turns stop on 10 (although such a price in the market and not). I think you can guess why. The broker itself might buy up to 10 your potatoes and then sell it at 12, put in your pocket 2 rubles per kilogram. Fortunately, most brokers will not allow you to make such a mistake. They do not need to designate the type of order, and if you place a buy order at a higher price, the broker understands - it's stop at a lower - limit. However, where required to determine the type of order, usually trading terminal has warned that this order is going to work immediately. When working on the phone operator, of course, warn you about the error. But he is a man may be mistaken. So think of the trader and to calculate the consequences of their actions is still needed.
The last question that we consider - the restriction on the price difference formulation. The sections that follow we will, among others, considered "pipsovye" strategy that is focused on making a profit, measured in units of points (a little - but often). It would seem to open a position, immediately became a take profit point, and wait, when due to "fluctuations" (vibration) the price it will work. And so 100 times in a row - there's your 100 points a day. But dreams are divided on the reality. First, you forget about the spread. To obtain a profit item, you must pass at least 6 points (if the spread - 5 points). But even this seems to be a winning strategy, as the brokers who profit from losing a client (the kitchen) are not allowed to put a certain order near the delta (difference) from the current price. This delta can be from 5 to 15 points at different brokers. Since I do not see any objective need for such restriction (although maybe it is introduced into the market - makers and brokers are forced to obey), there is great suspicion that all of the brokers - "kitchen". On the other hand, I have never met a broker without restriction orders. So maybe they're cooking? I do not know ...
In any event, before work, clearly understand, what the broker warrants exist, what are the characteristics of their production and performance, please read carefully the contract, ask the broker questions about e-mail, do some work in demo mode, which try to drive the wrong order with the "wild" prices. And just to fully understand all the nuances, you can begin trading.About how and when to place an order, consider one of the following articles about trading strategies.
Transactions carried out by brokers to their customers, obey orders (orders). The simplest is a warrant exchange market (Market Order). This is an order to buy or sell at current prices at the moment ("at the market price"). When you purchase this order means the immediate ad Dealers price (Ask), the sale - the closest bid to buy (Bid).
Let us digress for a moment on the order and specify the following: we already know that at any given time on the market, there are two prices - Bid (Bid) and offer (Ask)."Traders potatoes in the market, easily recognizable by their price tag - it has two prices - one to buy another - for sale." (Out of jokes about traders).
How can you not get confused? At what price display order? How to calculate the profit - loss? Fortunately, it's simple. First, we must remember a simple principle - the transaction is always less profitable for the trader's price. That is, if a trader buys, it is always at a higher price at a price of Ask, if you sell - at a price Bid. The same rule applies when the established orders. Order to buy (regardless of order type) is satisfied when the price of a warrant Ask price and sell order - Price Bid. Second, the trader is not necessary to particularly think about it - today's trading terminals all this is done automatically.
So, the market (market) order. Obviously, the use of such an order the trader opens up wide possibilities for manipulating the broker. A simple analogy - you want to exchange 100 dollars for rubles, but must do so through an intermediary (broker). Then the market order will sound something like this: "buy a $ 100 Dollars for the price, what will happen." In this case, you completely trust the integrity broker. The simplest scheme, which can hold a broker - to fulfill your order at the maximum price, and a counter transaction - at a minimum, putting the difference in your pocket. You do not notice it. That's why experts do not recommend the use of market order under any circumstances. He (market order) is widely used in stock markets and futures, the Forex is used very rarely. Instead it uses its modified version - the "request quote".
Request for quotation used to open a position, although this is not the only way. In this case the trader informs the broker name, currency, he asks for a quotation, and the value of the lot, which he intends to commit a transaction. All this is necessary for the sole reason that I mentioned in my previous article - do not match the price information and broker. The broker, in response, said a couple of prices - Bid and Ask. Broker reports price is not instantaneous, because he needs to check whether the right of a trader to work with a lot, then contact your market - maker and request a quote, to wait for an answer and then indicate the price the trader. On average, it takes a few seconds to half a minute. If more - it is better not to work with a broker or use other orders. Receiving a response to the request (by the way, when the price changes dramatically, the market is unstable, the broker may not give a quotation), the trader must answer - "buy", "sell" or - "nothing" (which means rejection of the open position). After reciting the trader of the words "sell" or "buy" deal is perfect, her agent confirmed the news that bought so much - for so much - that on this - the price. All calls are recorded on tape broker. Somewhat simpler procedure when working through the trading terminal via the Internet, but the essence remains the same. In principle, the trader can ask as many times as a quotation and abandon the transaction, waiting for a better price, but some brokers to limit this right (otherwise, the broker is overloaded with requests and other traders can not get through).
"Request Quotes" - the main and most commonly used command to open a position, but not unique. Consider other tools trader."Limit Order" or "limit order" (not quite the right term, but settled down). Is an indication of the broker to buy at a specified price or lower, or sell at a specified price or better.Many novice traders make the following error: they are considering staging a warrant on the price of open positions. It's just carelessness. You should always consider setting the order for current prices. Confused? Now I will explain with an example. A limit order is always exhibited at a lower price relative to the current market price. That is, if a buy order, then its price should be lower than market prices (cheaper to buy profitable, right?), If for sale - at a higher price. Assume a trader purchased at a price of 1.0150 euros. And the price has dropped to 1.0120. A trader wants to place an order to sell at 1.0140. Since the price of an order above the market price (1.0120), it is - a limit order. A "trader mistaken," looks at the price of open position - 1.0150, and wonders, "limitnik" de for sale should be higher. Now, I hope it is clear what he is wrong?
The last tool - "Stop - an order" (stop - an order). Performs the opposite with respect to the Limit order function. It aims to buy more of the listed value, or sell cheaply. Price stop orders to buy above the current price set for sale - below. Do not rush to decide that this is a useless and unnecessary tool because of its performance clearly leads to losses. This is the most important tool a trader, it is based on protection against deterioration of prices and thus of large losses (although such protection is like a lizard, break off their tail, or a wolf bite off his paw caught in a trap).
An interesting question - and it always orders "trigger" for a given price? The basis of the same principle - minimizing the benefits to the trader. That is, limitnik triggered exactly at the same price, that it specifies. I had a case where the price jumps jumped limitnik my 120 (!) Points. I also broker (bank, among other things) just opened a position at the order price, and I immediately formed a loss of 120 points. As I have argued that there was no intermediate "ticks" in any information system, the broker was adamant - he was such a price! Fortunately, such cases are very rare, as I can remember one or two cases.
Another thing - stop order. Common phenomenon, when it is triggered you will receive additional paragraphs 1-5 loss. This is called "slippage". If the "slippage" more, or is in a quiet market (where it never should be) - look for other, more honest broker.In recent years there have been variations discussed above orders - orders pending when the order takes effect after the operation of another order; order related, when trigger one cancels the other, etc. The presence or absence of these species allows for the use of complex multi-pass strategy (but I'm not sure about the effectiveness of such .) The essence of the warrants is not changed and that these "hybrids" I will not be considered, especially their work should be checked with your broker.
Occupy a special place orders Take Profit and Stop Loss. This is the usual limit and stop orders, but tied to a specific open position. Take Profit closed position when the projected profit margins, StopLoss also closes the position, but when the expected loss in order to protect the deposit from the further growth of losses. StopLoss - guillotine, cut off part of your money and "thrown out" with your market, catapult, it is always painful, but on the Forex as follows: those who can not chop off a finger - often loses his head (but not always).
And what happens if you try to install the "wrong" order, for example, a limit on the purchase at a higher price? Purely theoretical - it is just going to work at a specified price. It's like that in a market where the price of potatoes 12 rubles per kilo, you shout - "buy at 15 rubles!". Of course, the seller at that price there instantly. But at what price? The question is not simple. If you were a market - maker and would put a price on the market, then, of course, 15. But you are a trader, who works at least through two intermediaries. Therefore, your order is fulfilled to the highest available market price that is 12 rubles! If you are in such a situation will put the stop to sell for 10 rubles - he also immediately granted. Who will buy it for 10 if the price is now 12! But it turns stop on 10 (although such a price in the market and not). I think you can guess why. The broker itself might buy up to 10 your potatoes and then sell it at 12, put in your pocket 2 rubles per kilogram. Fortunately, most brokers will not allow you to make such a mistake. They do not need to designate the type of order, and if you place a buy order at a higher price, the broker understands - it's stop at a lower - limit. However, where required to determine the type of order, usually trading terminal has warned that this order is going to work immediately. When working on the phone operator, of course, warn you about the error. But he is a man may be mistaken. So think of the trader and to calculate the consequences of their actions is still needed.
The last question that we consider - the restriction on the price difference formulation. The sections that follow we will, among others, considered "pipsovye" strategy that is focused on making a profit, measured in units of points (a little - but often). It would seem to open a position, immediately became a take profit point, and wait, when due to "fluctuations" (vibration) the price it will work. And so 100 times in a row - there's your 100 points a day. But dreams are divided on the reality. First, you forget about the spread. To obtain a profit item, you must pass at least 6 points (if the spread - 5 points). But even this seems to be a winning strategy, as the brokers who profit from losing a client (the kitchen) are not allowed to put a certain order near the delta (difference) from the current price. This delta can be from 5 to 15 points at different brokers. Since I do not see any objective need for such restriction (although maybe it is introduced into the market - makers and brokers are forced to obey), there is great suspicion that all of the brokers - "kitchen". On the other hand, I have never met a broker without restriction orders. So maybe they're cooking? I do not know ...
In any event, before work, clearly understand, what the broker warrants exist, what are the characteristics of their production and performance, please read carefully the contract, ask the broker questions about e-mail, do some work in demo mode, which try to drive the wrong order with the "wild" prices. And just to fully understand all the nuances, you can begin trading.About how and when to place an order, consider one of the following articles about trading strategies.
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