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Buy ask/Sell bid - Isn't that just a market order?
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Buy ask/Sell bid - Isn't that just a market order?

 
Trading for Fun
Brisbane, Australia
 
Futures Experience: None
Platform: Sierra Chart
Broker/Data: AMP/CQG
Favorite Futures: "ES" - ALSO USING THIS SPACE AS MY SIG HAHA. GAMIN' THE SYSTEM. (j/k I do this for the lolz)
 
Posts: 63 since Mar 2018
Thanks: 56 given, 20 received

Buy ask/Sell bid - Isn't that just a market order?

Hi all,

The trade box window in Sierra Chart has the following buttons..

Buy Mkt
"Buy Ask" - (Limit order)
Buy Bid

Sell Mkt
Sell Ask
"Sell Bid" - (Limit order)



What's the deal/thought process with this.. isn't that just a market order, apparently it is a limit order.. why..

 
 
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Super Moderator
London UK
 
Futures Experience: Beginner
Platform: CQG
Broker/Data: S5
Favorite Futures: Futures
 
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Posts: 4,008 since Sep 2015
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Revan View Post
Hi all,

The trade box window in Sierra Chart has the following buttons..

Buy Mkt
"Buy Ask" - (Limit order)
Buy Bid

Sell Mkt
Sell Ask
"Sell Bid" - (Limit order)



What's the deal/thought process with this.. isn't that just a market order, apparently it is a limit order.. why..

Are you asking what the difference between market orders and limit orders is?

The following user says Thank You to xplorer for this post:
 
 
Trading for Fun
Brisbane, Australia
 
Futures Experience: None
Platform: Sierra Chart
Broker/Data: AMP/CQG
Favorite Futures: "ES" - ALSO USING THIS SPACE AS MY SIG HAHA. GAMIN' THE SYSTEM. (j/k I do this for the lolz)
 
Posts: 63 since Mar 2018
Thanks: 56 given, 20 received


xplorer View Post
Are you asking what the difference between market orders and limit orders is?

Possibly, but I don't think so.


What I am thinking is this, how can it be classified as a "limit" order if it is filled instantly like a market order and at the same price of a market order.

It is filled instantly because the liquidity is there on the opposing bid/ask (buy@ask/sell@bid) it is also filled at the market price regardless of the fact it is classified as a "limit" order.

Isn't this just a market order..

 
 
Super Moderator
London UK
 
Futures Experience: Beginner
Platform: CQG
Broker/Data: S5
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Revan View Post
Possibly, but I don't think so.


What I am thinking is this, how can it be classified as a "limit" order if it is filled instantly like a market order and at the same price of a market order.

It is filled instantly because the liquidity is there on the opposing bid/ask (buy@ask/sell@bid) it is also filled at the market price regardless of the fact it is classified as a "limit" order.

Isn't this just a market order..

It sounds like you are thinking about thick markets where the 'liquidity is there', such as treasuries.


Simplistically speaking, for the trader wanting to submit an order in such a thick market, by buying at market or placing a limit order at the offer gets the same result.



But Sierra Chart or any other platform does not know in advance which market you want to trade. You may be wanting to trade Gold, DAX or NQ for example, which are very thin. In thin markets, the behaviour of a limit order Vs. a market order are almost guaranteed to give you different results, as the bid/ask spread move quickly and sometimes unpredictably.



The other two things to always keep in mind:
  1. Market orders guarantee you to enter/exit the market. They do not guaranteee you the price at which you are filled.
    Limit orders guarantee you the price you want to be filled at (or sometimes a better price). They do not guarantee you are going to be filled.
  2. Using a market order you are taking liquidity away from the market (i.e. you are consuming liquidity). Using a limit order you are providing liquidity to the market. Most people don't care as long as they are filled, but this can be a profound difference in some cases.


These concepts become easier and easier to understand by looking at Order Flow.

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Elite Member
charlotte nc
 
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What you are referring to is known I believe as a marketable limit order.
You are asking to be filled across the bid / ask spread at a specified price.

So instead of joining the limit order queue to try to capture the spread, you are joining the market order queue against the spread. As long as there isn't a long line of market orders in front of you that could potentially knock out the whole level, you should get filled. But If you are number 100 in a line and there are only 50 limit orders holding up that price level, then by the time your number gets called, the new bid / ask level will have changed and you will miss your fill because you have protected yourself by specifying a price to fill, or else you are not interested.

A standard market order will take any price, but since you are specifying your entry price you can protected your self. The con's obviously would be the times where the market moves too fast, the price level changes, and you miss your fill.

So the 3 options again are:

1. Limit order: Define the price, capture the spread, but you can miss fills
2. Market order: You will get filled, but you can't pick the price
3. Marketable Limit Order: You lose the spread, but you define the price, you can still miss fills, but this will occur less often than with limit orders.

Hope this helps.

Ian



Revan View Post
Hi all,

The trade box window in Sierra Chart has the following buttons..

Buy Mkt
"Buy Ask" - (Limit order)
Buy Bid

Sell Mkt
Sell Ask
"Sell Bid" - (Limit order)



What's the deal/thought process with this.. isn't that just a market order, apparently it is a limit order.. why..


In the analytical world there is no such thing as art, there is only the science you know and the science you don't know. Characterizing the science you don't know as "art" is a fools game.
The following 4 users say Thank You to iantg for this post:
 
 
Market Wizard
North Carolina
 
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Platform: NinjaTrader, Tradestation
Favorite Futures: es
 
Posts: 611 since Nov 2011
Thanks: 257 given, 692 received

This is a feature is to protect yourself from large price movements off the mark you intent to execute against especially appropriate in thin, volatile, or fast moving markets.

The following user says Thank You to tpredictor for this post:
 
 
Trading for Fun
Brisbane, Australia
 
Futures Experience: None
Platform: Sierra Chart
Broker/Data: AMP/CQG
Favorite Futures: "ES" - ALSO USING THIS SPACE AS MY SIG HAHA. GAMIN' THE SYSTEM. (j/k I do this for the lolz)
 
Posts: 63 since Mar 2018
Thanks: 56 given, 20 received

Oh!!

Heck that is amazing, throwing my standard market order out the window for this type of order! will definitely be making use.

Thanks all.


 



futures io > > > Buy ask/Sell bid - Isn't that just a market order?
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Tags
bid/ask, dax, dow, limit order, limit orders, market order, nq, order flow, sierra chart, spread, type

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