The 3Dimensional Trading Breakthrough

Brian Schad
Brian: Keep in mind that when placing buy (or sell) stop orders, the order
must be placed above (when going long) or below (when going short) the
current market price. That is all that is required! Otherwise your broker
may remind you it is a “bad order. . .”
Host: Well that is easy enough to remember, Brian. I know there are
many more type of orders I could use. What can we go over next?
Brian: The next type of order we’ll cover is limit orders and the variations
of them! To avoid confusion, I will go over what I feel is the universal type
of limit order.
Limit orders: With this type of order, when used properly, I can
initiate, or offset, a position and avoid any and ALL negative slippage.
As a matter of fact, I can even receive a gross POSITIVE slippage in
my favor! This is not uncommon either.
Example #1 - Limit order (initiating a futures position): I want to go
long 3 December Wheat futures contract when the futures test the
last low of 261^0 and reach a price of 265^2, but NOT higher (Price
is now at 268^0):
“This is a day order for account #12345, buy long three Dec Wheat at 265¼, or
better.”
Example #2 - Limit order (initiating a futures position): I want to go
short one June Live Cattle futures contract when the futures rally to
a resistance level of 67.75, or higher:
“This is a day order for account #12345, sell short 1 June Live Cattle at 67.75, or
better.”
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