Timeline for Is it possible to improve stock purchase with limit orders accounting for volatility?
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| May 25, 2015 at 11:31 | comment | added | gengren | Ahh, now I see where you come from. Your problem, leaving aside the tea leaves, is that your account will get money once a month. Your technical analysis will give you a value today but I suspect it will give you a different value altogether if the stock is up 8% tomorrow. If your order is filled today you have a month to feel guilty about it. If you wait till the last day you trade guilt for opportunity. To be clear, I'm not apologizing for market orders, I place orders above ask the moment I decide to get on board. | |
| May 25, 2015 at 10:56 | comment | added | Calculus Knight | I suspect so. I'd still have the option to cancel. The idea is using historical data to make the probability of executing the order high enough but still slashing some cents from the purchase price. When I place the order I always ask myself how much could I push down and still get the stock within days. However, my question might be invalid in the sense that such analysis isn't quantitatively worth it when it comes to monthly purchases. | |
| May 24, 2015 at 19:52 | comment | added | gengren | @Tachibana maybe you aren't being all that clear. What are you attempting to achieve by using a limit order? Both with your current strategy and your proposed alternative. Even now you're risking not buying the stock at all even if it usually works. Assuming stocks go up most of the time, that's money you lose. As I understand it you are investing if and only if your bet works. | |
| May 24, 2015 at 16:00 | comment | added | Calculus Knight | The comission is the same for a market order and a limited order. This isn't about predicting a lower bound (which I know it's impossible), but about setting the limit order with the most appropriate target price so it gets executed within the day or soon afterwards. I wouldn't mind a market crash: there would be no disadvantage to executing the limit vs market order in that case. I've set all my orders between bid and ask prices and have been executed immediately. Your points, valid as they might be, don't answer my question. | |
| May 24, 2015 at 9:34 | history | answered | gengren | CC BY-SA 3.0 |