| Buying stocks appears fairly
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| | confirmation (showing the price you paid
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| straightforward at first glance, however
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| | for the stock) is delayed significantly.
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| there are several points you should
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| | This makes it extremely difficult to
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| consider before blinding placing your
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| | judge what a "fair and accurate" price is
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| first trade to buy or sell a stock.
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| | and/or when your order should have been
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| Following is a brief outline of points to
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| | executed. It also opens you up to
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| consider.First and foremost, you need to
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| | possible foul play when it comes to how
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| understand that stocks are sold to you at
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| | your order is processed and/or handled.
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| one price and bought back at a slightly
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| | As such, unless you are dealing with a
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| lower price. This difference is called
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| | fairly orderly market, we suggest using
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| "the spread". And while the spread has
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| | what are called limit order.A limit order
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| generally decreased over the years, you
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| | works just like you might think. It is an
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| are still taking a hit when you purchase
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| | order with a limit price attached to its
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| a stock (assuming you should want to turn
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| | execution. When you place your order, you
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| around and sell right away). The bid
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| | specify a limit to the price you'll pay.
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| price is the price the market will pay
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| | While limit orders are usually executed
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| for a stock when you go to sell it, while
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| | after market orders, they do provide a
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| the ask price is the price quoted to
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| | higher level of protection against over
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| those who wish to purchase the stock from
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| | paying, etc. Additionally, we feel they
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| the market. Nothing says you cannot try
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| | are a fine method to use when trying to
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| to buy at the bid and sell at the ask,
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| | take up a position at a lower than the
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| but this will generally delay your
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| | market price. You should keep in mind,
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| execution.On the topic of bid and ask
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| | however, there are two types of limit
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| prices, you should note that there is a
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| | orders, a stop limit as well as a market
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| corresponding "size" which relates to how
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| | limit. A stop limit order is an order
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| deep the orders run on the bid and/or ask
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| | which becomes a stop (such as a stop
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| size at any given price. As an example,
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| | loss) once the price is reached. Keep in
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| you may have 100 people trying to buy a
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| | mind with this sort of order, the market
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| stock at a specific price, while only 10
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| | can pass right by you, where as with a
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| are trying to sell. This directly impacts
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| | normal limit order (which basically turns
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| how much stock is available at any given
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| | into a market order once hit) you stand a
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| bid or ask price. Once the orders to buy
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| | better chance for not only execution, but
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| or sell a stock at a given price are
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| | seeing an improvement on your execution
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| filled and/or canceled, the price adjusts
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| | price. This is because once your market
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| according to the remaining orders -
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| | order is set, the market may move in your
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| either at higher or lower prices. If
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| | favor during execution, but you will
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| there is a 'void' of orders at any given
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| | never pay more than your limit. Limit,
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| level in the market, a stock is said to
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| | stop and market orders apply directly to
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| "free fall" or "gap" to wherever there
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| | both buying and selling of
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| are buyers or sellers. Keep in mind as
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| | stocks.Sometimes being in cash gives you
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| well, how this area of pricing is handled
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| | the best strategic position from which to
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| is sometimes dependent on where your
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| | trade, and this is often an overlooked
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| stock trades. On the NYSE, for example,
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| | fact of daytrading. Remember, you can't
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| bid and ask sizes are displayed by a
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| | take advantage of market dips if you are
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| market specialist whose job it is to
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| | already in the market! In my view, it's
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| ensure an orderly market. However, on the
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| | better to be out of the market more for
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| Nasdaq, multiple market makers my line up
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| | day trading than in the market. This will
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| at different prices advertising to the
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| | allow you to get in and out with profits
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| market to buy or sell at different
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| | quickly and be on the sidelines should
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| levels. Detailed information regarding
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| | dips occur. It also drastically reduces
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| where a specific market maker (generally
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| | the risk to your capital as compared to
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| a large brokerage firm) will buy or sell
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| | just sitting in stocks that aren't moving
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| a given stock is provided via Level II
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| | and/or holding trades for excessively
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| data.Next, you should understand there
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| | long periods of time. Try to be out of
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| are several different types of orders
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| | the market more with your trades and in
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| that can be placed to buy or sell a
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| | the market more with your investments (as
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| stock. The most common is called a
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| | long as they are good investments of
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| "market order". This means buy or sell at
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| | course).
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| the market price. However, keep in mind
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| | Above all else one of the most important
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| once this type of order is placed, you
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| | and most widely over looked aspects of
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| are nearly powerless in your control of
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| | being a successful day trader is working
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| the price paid should the market make a
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| | on your personal life and how you conduct
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| sudden move. In a very active market, you
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| | yourself.
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| can also run into situations where your
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