uptufernou
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to all those knowledgable traders please forgive me but i need an answer if possible. i have been papertrading for a good while now (didn't want to take the plunge until i had a strategy i was comfortable with) and have achieved good results ON PAPER!
the question i pose is.... if share xyz is trading at 31.5 on the ask and 31.45 on the bid,
and i buy at 31.5. i set my stop at, say 31.3 giving a potential loss of 20c
if the trade goes against me.
the trade goes against me to 31.34 before reversing and going in the direction i anticipated. because of the spread of 5c i would be stopped out by 1c.
do you add the 5c spread into your stoploss price ie20c stoploss plus 5c spread=stop now 31.25 or do you accept the spread in your calcs.
on a tight spread, 5c either way can make a difference to a successful trade or a losing trade. by the way i am talking about direct access trading the nasdaq stocks
. how do others set their stops taking into consideration the spread?
i know you can use limit orders but what do you do if not using limit orders?
any advice would be greatly appreciated.
thanks
uptufernou
the question i pose is.... if share xyz is trading at 31.5 on the ask and 31.45 on the bid,
and i buy at 31.5. i set my stop at, say 31.3 giving a potential loss of 20c
if the trade goes against me.
the trade goes against me to 31.34 before reversing and going in the direction i anticipated. because of the spread of 5c i would be stopped out by 1c.
do you add the 5c spread into your stoploss price ie20c stoploss plus 5c spread=stop now 31.25 or do you accept the spread in your calcs.
on a tight spread, 5c either way can make a difference to a successful trade or a losing trade. by the way i am talking about direct access trading the nasdaq stocks
. how do others set their stops taking into consideration the spread?
i know you can use limit orders but what do you do if not using limit orders?
any advice would be greatly appreciated.
thanks
uptufernou