I was just reading the first pages of “trading for a living” by Alexander Elder and suddenly I read: “...To reduce slippage...Use limite orders, buy or sell at a specified price...”. Then I remenbered that recent thread about people complaining about FXCM's “at best” order (a market order), and merlin saying that proffesionals use only limit orders. Here is my question: (hope You are reading this Merlin, I was going to post this as a reply for the market orders complaint's thread, but since this is a question about limit orders I though it should be posted here as a new thread).
Lets say I have a strategy where I use daily charts. Each day at 00:00 GMT (just an example) I look at the charts and if I see a good setup, I place a trade which usually will last for a few days. With this kind of strategy, how should I enter the market? I mean, if I see a good setup I want to enter the market right now, but I keep reading books and and I keep hearing “don't use market orders!!!”. I'm thinking that if I can't (or shouldn't) use market orders then I would have to place a limit order closer as possible to the current price...this will take a few pips away from me on every trade, although slippage may take even more pips....? Note that I'm not talking about intraday and/or news trading.
So, hope to see some replies.
Thanks!!!
Lets say I have a strategy where I use daily charts. Each day at 00:00 GMT (just an example) I look at the charts and if I see a good setup, I place a trade which usually will last for a few days. With this kind of strategy, how should I enter the market? I mean, if I see a good setup I want to enter the market right now, but I keep reading books and and I keep hearing “don't use market orders!!!”. I'm thinking that if I can't (or shouldn't) use market orders then I would have to place a limit order closer as possible to the current price...this will take a few pips away from me on every trade, although slippage may take even more pips....? Note that I'm not talking about intraday and/or news trading.
So, hope to see some replies.
Thanks!!!
"I say high, You say low, You say why, and I say I don't know..."