Should I use bid/offer orders (spread free) over limit orders? | Forex Factory

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Should I use bid/offer orders (spread free) over limit orders?

  • #1
  • First Post: Mar 3, 2013 5:19pm Mar 3, 2013 5:19pm
Does anyone use bid/offer orders over limit buy/sells ?

With my broker, I can place bid & offer orders into the marketplace which allow me to act as a market maker. I've never really used these orders except when trailing on demo. the main feature of these orders from what I can see is there is no spread to pay, essentially the buyer/seller on the other side pays the spread.... what are the potential dangers of these orders and why doesn't everyone use them if they are "spread free" orders? I'll be honest I've stayed away until now through ignorance.
  • #2
  • Mar 3, 2013 6:22pm Mar 3, 2013 6:22pm
Quoting evertontrade
Does anyone use bid/offer orders over limit buy/sells ?

With my broker, I can place bid & offer orders into the marketplace which allow me to act as a market maker. I've never really used these orders except when trailing on demo. the main feature of these orders from what I can see is there is no spread to pay, essentially the buyer/seller on the other side pays the spread.... what are the potential dangers of these orders and why doesn't everyone use them if they are "spread free" orders? I'll be honest I've stayed away until now through ignorance....
Certainly the bid and ask price at any point in time is still different, right?
  • #3
  • Mar 3, 2013 6:40pm Mar 3, 2013 6:40pm
Quoting Kanzler
Certainly the bid and ask price at any point in time is still different, right?

Yes but if you are buying on the bid you are not at a losing P&L immediately like when you buy the ask. You can sell the bid with a market order as usual at no loss. Also many brokers will pay rebates on commisions when you provide liquidity. The only down side is the occasional missed trade due to not getting hit.
  • #4
  • Mar 3, 2013 7:14pm Mar 3, 2013 7:14pm
Quoting Seneca pilot
Yes but if you are buying on the bid you are not at a losing P&L immediately like when you buy the ask. You can sell the bid with a market order as usual at no loss. Also many brokers will pay rebates on commisions when you provide liquidity. The only down side is the occasional missed trade due to not getting hit.
Thanks for the clarification. It doesn't seem like it would be worth risking missing the entry for the cost of the spread personally.
  • #5
  • Last Post: Apr 3, 2013 2:24pm Apr 3, 2013 2:24pm
I can confirm that you SHOULD DEFINITELY be using bid/offer orders if you are placing standard limit entry orders as they are pretty much identical but allow you to buy on the sell price & sell on the buy price paying 0 spread.
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