How can I set up this stock buy order?

Question

Hello All:

I am trying to figure out a way to place an order, in Scottrade's conditional order system, to buy a stock if its today's low stays above yesterday's value of the 20-day closing average. I don't want to buy if it drop below that value.
Any ideas on how I can set up something which can get me in at today's low, or close to it, if this condition is met?

Thanks

Answer 1

You can set a buy limit at the price above the MA, but there's no guarantee what happens to price after you enter the trade. That's why we use stop loss orders.



Set a conditional order to also execute a stop several ticks below the MA, or do it manually immediately after you're alerted of an entry. Your risk is small, no amount of worry will change the outcome, and the market will tell you whether you're right or wrong.



For each setup you may have, each would have specific rules both for stops, exit and entry. This is your Trade Plan.



Combine your setup with pattern setups and you have the basis for a good trading system. Others that have done excellent studies on the use of this tool are E. Hadady, Larry Williams, and Toby Crabel.



If you want to email me, I can send you five diagrams of entry methods that you could combine with your setup. They are:

• Four weeks high or low (Donchain or Turtle Breakout)

• Trend line or Moving Average breakout

• Tight range of closes

• Two prior closes

• Breakout from support and resistance, Pivot point, High and Lows, etc.



Trade moving markets and avoid dull sideways markets (W.D. Gann). This cannot be emphasized enough. A market unable to make a new high for 10 bars raises a red flag.



To identify a strong Resistance zone, look to what stopped a powerful thrust. Likewise, an anemic rally into resistance has only identified a weak resistance zone. A weak resistance zone will more than likely be broken the next time it is tested. The other thing that identifies strong support and resistance is the number of times that zone has been tested.

Answer 2

You are not seriously asking how to place a "Buy on Low" order with Scottrade are you?



Edit: "Is it possible to set up a trigger to buy order to buy, close to or just above, the last value of the 20-day closing average"



Yes, you would just enter a limit order at the 20-day MA price which you would have to do everyday unless you had a pretty fancy interface that I would never trust. However most of the time this would be pathetically stupid. On a rising stock you would be setting a limit order far below the stock price which would be the same as a market order. On falling stocks you would be giving away call options because on a sudden reversal they would just ding your order on the way up and you would always get lousy fills. So either: a) You are just entering market orders or b) You are handing out free options which will smack you.



", such that the price does not go below it?"



Huh? Nobody can make an order that says that the price will never go below the fill price.



Have you heard about mutual funds? They have highly experienced people there who will od this for you much, much better than you can do it yourself.

Answer 3

And how would you know that it was the low till the end of the day?



You're probably thinking of placing a buy order with a stop that's two 20-day standard deviations above yesterday's close. That way you would only issue a buy order if the stock price exceeds the 97.5% range that would be expected over a 20 day period. Of course you will also be getting the stock at that higher price.



You could buy a call option, that way you don't have to actually buy the stock unless the stock price rises above the strike price of the call option in which case you could buy the stock at the strike price instead of the market price. However, you will be paying a premium for that and you will have to work in 100 share lots.

Answer 4

There is no way to do that. All you can do is predict a high or low and place a Limit Order. There is no way that a broker could know the high or low of the day to place a order, since there is 2 sides to the transaction. If people could do that, then you would never be able to buy a stock at the low price, because the seller side would set up to sell you at the highest price

Answer 5

Yes, you are able to do. You are going to get an indication of the 'suitable' fee by way of looking on the last few trades. It rather is dependent upon how liquid the stock is and the tightness of the spread. Furthermore it relies why you are environment a restrict. Is it simply to be intelligent? If you happen to believe the inventory is going up you need to buy it. It is no factor lacking a alternate via a silly restrict and then seeing the inventory shoot up. Limits need to be utilized sensibly and for a factor. Penny shares often have wide spreads on the screen costs so you have to be speakme to the market makers (or through dealer) to get the quality price.

Answer 6

"Fill or Kill"?