The Basics of Slippage
Getting into a trade is like jumping into a fast-moving river. The opportunity as well as the danger is in the water. You are safe standing on the bank and can control where and when to jump, but getting out of the water can be more tricky. You may see a spot where you want to get out - a profit target, where you can place a limit order. You may want to let the river carry you as long as the current allows, protecting your position with a trailing stop. That may increase your profits, but it will also increase your slippage.
Limit orders work best for entering trades. You will miss a trade once in a while, but there will be many others. That river has been flowing for hundred of years. A serious trader uses limit order to get in and to take profits, and protect his position with stops. Anything we can do to reduce slippage goes directly to our bottom line and improves our odds of long-term success.
Options strategy
Limit orders work best for entering trades. You will miss a trade once in a while, but there will be many others. That river has been flowing for hundred of years. A serious trader uses limit order to get in and to take profits, and protect his position with stops. Anything we can do to reduce slippage goes directly to our bottom line and improves our odds of long-term success.
Options strategy
