Ideal orders for stock trading

Every trader must know in advance what orders he will use. Skills for entering and closing of the trade are very important.

Some brokers offer a lot of variations of orders. Some stock trading software offers only several basic types.

I like trading software of my broker. It has lot of options to enter or exit from the trade.

I use these techniques for opening and closing of the trade.

Entering the trade

My work starts before any trade is entered. When my trade setup is prepared and I have my entry , stop and target points prepared, I put stock symbol into my watch list. Watch list is nice feature of my stock broker trading software.

Then I set alert for every symbol I have entered. This alert has to signalize that price is approaching defined entry level for particular stock. Alert should work some time before defined entry point is reached.

Here is stock alert example: I want to enter long trade when stock is traded at 40. So I set alert to activate when price reach 39.50. Then I have enough time to prepare order for entering trade.

I wait for alert to notify me that some action is required. I do not enter any trade during first 5 to 10 minutes. I wait when price settle after first 10 minutes of trading day. If my price entry is triggered during first 10 minutes I do not enter trade. Also if price make gap during opening time, I prefer not to enter trade.

When everything is going well and I receive info from alert I set order for entry. I use BUY STOP order for longs or SELL (or SHORT) STOP order for shorts. This order is set for price defined in my trade setup and is valid for current day only.

My trading software is set to produce alert and notify me when entry order is executed. Immediately after I know that my stock trade is open, I am entering protective stop loss order.

Stop loss and trailing stop

This type of order is known as a stop order. It is similar type of order as I use for entering the trade. When I have some trade opened from previous days, I enter stop orders for these trades after first 10 minutes of trading. When gap occurs then simple gap rules must exist to know how to handle such situation.

When I am in long trade I enter SELL STOP order for duration of current day only. I enter my stop orders every day as I monitor markets daily.

For short trade I enter BUY (or COVER) STOP order with one day duration only.

Exit from trade

You need not to do anything special when you are using moving (trail) stop strategy . You are waiting for breaking of this stop level by price. Then exit from trade is realized automatically.

I personally use fixed value price targets. I have set alert to notify me when price reaches values near my price target. In such case I am monitoring situation closely. When price target is reached , I use Limit or Market order to get out from trade. When I have more targets I close part of my position. One half as a minimum, but preferably 2/3. For rest I use trailing stop strategy.

My special stock market trading tips :

I prefer to enter trade by stop market orders as they allow me to be in trade quickly. Breaks of support or resistance can be very quick and price can move too far from your entry point if you are waiting to entry Limit order manually

Use good trading software (like my broker software) with alert functionality. It will make your trading easier.

Do not afraid to use Market orders. I select only liquid stock for trades so market orders will provide you with good entry and exit values. One, two or five cents does not matter ...

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