Limit Order Not Being Filled?

Beginner Questions
1

Hey guys,

I’m paper trading at the moment, but I’m having a difficult time figuring out limit orders. I know what they are, but mine are just not getting filled. For instance, I’ve sold the AUD/USD pair and want to buy when it reaches a certain target price. I place a limit order to buy when it reaches 1.0380. The price goes down to this level, and maybe even goes past it to 1.079, but nothing happens. I’m left unfilled…and as I’m typing this, my limit order just got filled, but it took several minutes. Is this because the price is fluctuating so rapidly that it’s missing the mark? Do I have to just be patient, or in your experience, do limit orders just not get filled sometimes? I’m a little concerned with locking in profits at a particular price, but I’ve only been partially successful.

2

You are forgetting to add the spread to the entry orders. Same goes for stop loss and take profit. You will be surprised how many traders with some experience still don’t know this

3

Thanks for the reply, Mike. Would you be willing to elaborate on this, because this is the first I’ve heard of accounting for the spread. Does this mean that if I wanted to buy at 1.0300, and the spread was 2 pips, I would place my limit order at 1.0298 to account for the spread? How does this work when closing a position, however? At that point, isn’t the spread already factored into the entry?

4

If you want to buy @ 1.0300 and the spread is 2 pips, then you should fill your limit order at 1.0300 itself. Only thing you want to remember is that almost all platforms are displaying their bid price on the charts and is not the ask price. Hence your limit order to buy at 1.0300 will get filled only after getting price at 1.0298( 1.0300 - 2 pip spread) in the chart. If you place your buy limit order at 1.0298, then it will be filled after getting bid price (Chart price) at 1.0296.

Hope it helps…

5

That does help. I understand how that works for entering a trade, but what about exiting? Anything special to consider there?

6

When you sell, you get the bid price…bid prices are usually the default price shown on the charts. However, when you buy, it fills at the Ask price, which is above the bid price by whatever the spread is. So if you set a limit price of 1.0380, usually you need to see the bid price go below that by the spread…but if the spread widens, you may need to go quite a bit below.

1.0382
1.0381
1.0380 ----- Ask price
1.0379
1.0378---- Bid price

I take it you’re not using MT4 …is there a setting you can use to show both ask & bid prices at the same time?

7

Thanks for the reply. I’m using thinkorswim - which I know is geared more to stocks, but that’s what I began to trade and found out how much better I’m suited to forex. That software does have a way for you to see the bid and ask at the same time, however, I don’t think it shows it directly on the chart. Perhaps there’s a way to customize that.

Anyway, I’m in the pricess of opening a TD Ameritrade forex account, and Zecco has also approved me for forex trading. The problem with Zecco is that I use a Mac, and they don’t have software that will run on Mac. I’d have to use their web trader, which is buggy and is known to go down for days at a time. Zecco’s support is also subpar - their employees didn’t even know about some of there own services.

Anyway, with Ameritrade I can continue to use thinkorswim and their mobile apps without any issues.