📈 L'importance du remplissage des transactions

Table of Contents:

1. Introduction
2. Importance of Getting Filled on Trades
3. Determining the Size of a Stop Limit Order
4. General Guideline: 20% of the Stop Loss
5. Exceptions and Variations
6. Spready Stocks and Wide Spreads
7. Case Study: NVIDIA
8. Case Study: Microsoft
9. Benefits of Stop Limit Orders
10. Conclusion

📈 Importance of Getting Filled on Trades

Getting filled on trades is crucial for traders to execute their trading strategies effectively. While chart patterns and setups are essential for pattern traders, it becomes irrelevant if traders are unable to enter the trade due to unfilled orders. One key aspect that needs special attention is the size of the stop limit order, which determines how much room traders give their orders to get filled.

Determining the Size of a Stop Limit Order

The size of a stop limit order is determined based on a general guideline: approximately 20% of the stop loss size. For instance, if the stop loss is $1, traders should give the stop limit order a range of 20 cents. This means that if the entry price is $100 and the stop loss is at $99, the stop limit order should be set from $100 to $100.20.

Exceptions and Variations

While the 20% guideline is a good rule of thumb, it's important to note that there can be exceptions and variations depending on the stock's liquidity and volatility. Some stocks may have wider spreads or be more whippy, requiring traders to adjust the size of their stop limit orders accordingly.

Spready Stocks and Wide Spreads

Certain stocks, known as "spready" stocks, can experience wide spreads, making it crucial for traders to give their orders sufficient room to get filled. For example, stocks like NVIDIA, Tesla, or Amazon may have spreads of 50 cents or even a dollar. To avoid getting skipped on these trades, it is important to set a stop limit order that accounts for the stock's spread.

Case Study: NVIDIA

Let's take a closer look at NVIDIA as an example. On a particular day, there was a three-bar play on the one-minute chart. The entry price was $731.61, and the stop loss was set at $734.01, resulting in a stop loss size of $2.40. Checking the spread of NVIDIA, it ranged between 10 to 40 cents. Applying the 20% guideline, traders should have given the stop limit order around 48 to 50 cents to increase the chances of being filled.

Case Study: Microsoft

On the other hand, stocks like Microsoft tend to have tighter spreads, making it easier to get filled. For instance, if the stop loss is 50 cents, traders can give the stop limit order around 10 cents to ensure a higher likelihood of being filled.

Benefits of Stop Limit Orders

Using stop limit orders instead of other order types such as stop market orders provides certain advantages. With a stop limit order, traders have control over the price range at which they enter the trade. By specifying a limit on the order, traders can ensure they only get filled at the desired price or better, preventing unfavorable fills due to sudden market movements.

Conclusion

In conclusion, getting filled on trades is crucial for traders' success. By understanding the size of a stop limit order and adjusting it based on the stock's liquidity and volatility, traders can increase their chances of being filled. Remember to give the order enough room to account for spreads, especially on stocks with wider spreads. Using proper order types and considering the specific market conditions will help traders execute their strategies effectively and avoid being skipped on potential profitable trades.

FAQ:

Q: Why is getting filled on trades important? A: Getting filled on trades is important because it allows traders to execute their trading strategies effectively. Without being filled on trades, traders are unable to take advantage of potential profitable opportunities.

Q: How can I determine the size of a stop limit order? A: As a general guideline, the size of a stop limit order can be set at approximately 20% of the stop loss size. This helps ensure that there is enough room for the order to get filled.

Q: Are there any exceptions to the 20% guideline for stop limit orders? A: Yes, there can be exceptions and variations depending on the liquidity and volatility of the stock. Some stocks may have wider spreads or be more volatile, requiring traders to adjust the size of their stop limit orders accordingly.

Q: What are spready stocks? A: Spready stocks are stocks that have wider spreads between the bid and ask prices. These stocks often require traders to give their orders more room to get filled.

Q: What are the benefits of using stop limit orders? A: Stop limit orders give traders control over the price range at which they enter the trade. By specifying a limit on the order, traders can ensure they only get filled at the desired price or better.

Q: How can I avoid being skipped on trades? A: To avoid being skipped on trades, it is important to give the stop limit order enough room to account for spreads and market movements. Adjusting the size of the stop limit order based on the specific stock's characteristics can improve the chances of being filled.