For the life of me I can't figure out why someone would ever enter the market via a limit order.
Seriously. Think of a car that drives up and down the same road all day. Why would you think that at a certain point in time the thing is going to screech to a halt and turn around to go the other way? Wouldn't you think it's going to pass through that point and keep going since it's already headed in a certain direction?
Same thing with price. Pending stop orders make sense. Price is going up, as it crosses the buy stop line the order is entered and you're in headed in the current direction of the price. Why would someone think that price is headed in a particular direction enough that it's going to pass through a particular point but as soon as it kisses that price it's going to instantly double back and go the other way?
Isn't someone who uses limit orders trying to "pick tops and bottoms" when nobody can really do that?
I'm sure people run systems with these things that generate them a lot of money....but I can't imagine how such a system would work.
Seriously. Think of a car that drives up and down the same road all day. Why would you think that at a certain point in time the thing is going to screech to a halt and turn around to go the other way? Wouldn't you think it's going to pass through that point and keep going since it's already headed in a certain direction?
Same thing with price. Pending stop orders make sense. Price is going up, as it crosses the buy stop line the order is entered and you're in headed in the current direction of the price. Why would someone think that price is headed in a particular direction enough that it's going to pass through a particular point but as soon as it kisses that price it's going to instantly double back and go the other way?
Isn't someone who uses limit orders trying to "pick tops and bottoms" when nobody can really do that?
I'm sure people run systems with these things that generate them a lot of money....but I can't imagine how such a system would work.