Situation: I've just inherited X$, which I'd like to invest in my favorite stock. I got the money right now in my checking account, every day that passes without it being invested is a waste. Also, suppose that I'm not too knowledgeable about the specifics of the different stocks, and my investment strategy is "put every spare coin you have into an index fund, whenever you have coin to spare".
My question is how should I decide on the stock rate limit? Suppose the stock is going at 1000 $ per share. What I usually do is invent some percentage, say 1%, and then attempt to buy the stock at maximum 1% over the current price. My reasoning is that I really just want to transfer my cash to stocks now.
My problem is that the dependence on that arbitrary number that I make up. Let's say the stock goes up by 2% the day I attempt to buy it, and I fail to buy it. Now I'll be left with the same problem tomorrow, only my cash will buy me 2% less of the stock - perhaps if I was willing to pay 1.5% above the stock price I would have saved me the trouble. How should I decide this limit?
The same applies when selling stocks, obviously.