So I meant to say this, I very rarely talk about specific tactics because it’s an audio show and it’s hard to see stuff, but some of you might be frustrated with the volatility and so now you’re going to opt to trade with Limit orders. I would strongly encourage you to not do that, especially if you’re trading large size. If you’re trading ones and twos, you can probably get away with it. But what the “Limit” says is instead of using a stop where when elected the stop order becomes a market order, when you put in a Limit, it has to be that number or better. So what happens is there might be trades ahead of you that have to get done right once the number’s elected, but then it falls below what you need your Sell Limit price to be.
And so even though you’re in that neighborhood say you have $8 a share or 25 points on an e-mini, and you you put your Limit because you emotionally want 25 points. When you think about it, that’s kind of stupid because to me there’s no difference between taking 23 points or 25 points at that time. And if you get too cute with your Limits, you could see the thing come back down to 15. So then how do you feel?
You know, you can process those feelings right now and realize that that’s being a little too uptight about things. So if you have an order that you want to sell and you get to 25 points in your favorite, then just execute it or put your Stop in whatever, 3, 4, 5 points below the market. But if you start putting in Sell Limits above the market in and around where you think there’s a price target or the market’s going to stall it very well might trade through that price.
But if you have too many instruments to go, too many shares, you might not get filled. You might not get filled on the whole thing. And I’ve had a lot of slippage in skid. Trust me when I tell you that if you had all the slippage and skid that I lost right now in your own account, you’d be very wealthy. And that’s just part of the business. And now is not the time. Now is not the time to be holding on too tightly. You have to be flexible. And if you start thinking price targets and Sell Limits and that’s the number that you want out of the trade, that’s an emotional issue, not a financial one.
Because financially there’s no difference between 23 points on the e-mini and 25. And don’t tell me it’s a hundred bucks because who cares about that? That’s a sushi dinner. No big deal.
This is a computer generated transcript.
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