Series 7 Exam Course

If, however, you can use a specific price order as opposed to a market order, this is preferable. It is not uncommon for markets to make a quick move following a signal, but very often the market returns to its original entry price fairly soon, and a price order would have been sufficient. You can save a great deal of money this way.

If you are riding a fairly large profit and wish to exit a position quickly since your indicators have turned, then it is worth giving some of the profit back just to make sure you are out of your position.

Avoid market-on-close (MOC) orders. All too often such orders are even more of a license to steal, since they can be filled at almost any price during the last minute of trading. An MOC order in thin markets is a certain invitation to trouble.

Avoid MOC orders unless absolutely necessary. Many traders jokingly refer to MOCs as "murder-on-close" orders, since fills are often so poor. Never use market orders with spreads. You are far better off using specific spread levels for entry and exit, or you may use specific price orders in each market individually to "leg" into or out of the spread. Considerable slippage is the rule in spread market orders. Unfortunately the only orders you can use in spreads are market orders or price orders.

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