Hi
I have been experimenting with the order entry methods (Market/Limit) and have noticed a few things. I understand how the Market orders work since this is straightforward but the Limit orders havent been working exactly as I expected.
When I create an Limit order it doesnt seem to get filled all the time which causes me to miss out on some decent trades. Can anyone shed some light on this subject?
What exactly do you mean when you say “it doesn’t seem to get filled all the time”?
Is it getting filled at a different price or not at all?
Is it a Buy Limit or Sell Limit?
Here’s a couple of good explanations of Limit Orders (if you haven’t gone through Babypips free school yet, it’s a good resource to look into):
Terry
It doesnt get filled whatsoever but sometimes it does…I understand the difference between the order entry methods in Theory but in practice the Limit order is not working as expected.
Will the Limit order only get executed if the price moves to the price specified or within range?
It depends on what type of Limit Order you place.
A Buy Limit Order can only be executed at the limit price or lower.
A Sell Limit Order can only be executed at the limit price or higher.
There’s also a Stop Limit Order. This is the explanation taken from EFX’s site:
“Works like a Stop Market order with one major exception. Once the order is activated (by the currency trading at or through the stop price), it does not become a market order. Instead, it becomes a limit order with a specified limit price. The advantage of this order is that you set a specified price at which your order can be filled. The disadvantage is that your order may not be filled. In this case, your exposure to loss will continue until the position is closed.”
Maybe you’re using a Stop Limit Order and that’s why it doesn’t always get filled.
Terry
In addition to Terrys explanation be aware that there has to be suffiicient volume available in the market to fill you. In addition if you are using a retail broker they might indulge in all sorts of games at your expense
Thanks for the responses I have read the links provided and now have a better understanding of whats happening. I havent been using a Stop Limit order but I think the order may have not been filled due to fast price movement.
When I enter a trade I use a limit order without SL but once it gets filled I then set the TP and the SL accordingly. I was unclear about how exactly the limit was triggered since it was not working as expected.
The issue with price movement is possibly due to a combination of factors one of which being latency. Since the price quoted is usually not the price I get even if I use a market order with a range of 0.
Glad you figured it out. Like Tony said, there can also be other factors involved, including broker problems (thanks, Tony, for the additional details).
Just for reference, what broker are you with?
Terry
I am currently with FXCM which seem to be ok but I do experience a hugh differential when I enter trades between the quote and the actual price obtained. This usually occurs whether I set a Market order = 0 or with a Limit order at a specified price and I have been using without Stop loss.
Now from what I gathered is that the BUY Limit order is executed either at the price specified or better thus lower. Now theres been loads of occasions which the price is lower than the limit for quite a while and it doesnt get filled.
If it does get filled then it is usually quite lower than anticipated since for GBP/USD pair the spread should be 3 pips but whenever I enter a trade this seems to be 10 times that regardless and I start off from a large negative position so the price has to increase at least 50 pips for me to make a profit in most cases I do but in some cases I dont because of this issue.
I am currently using there DEMO account so am not sure if this is a major contributing factor or its due to the end-to-end latency. I like there trading platform although it is limited in terms of constructing more sophisticated entry/exit strategies it is still very good.
I’d be calling them and letting them know about this. There’s no way that there should be that much difference in your orders.
Call them and explain the situation. It could be a glitch that they can fix. If not, I’d look for another broker.
It’s hard to make money when you’re behind the eight ball like that.
Terry