Silk Road forums
Discussion => Security => Topic started by: Anti-Dumbass Club on August 18, 2012, 02:26 am
-
When I see the price of btc skyrocket each day I can't help but think that a bunch of people are out there paying full market price for coins. I want to help you try and get a better deal.
The bid/ask spread (the difference between the price at which you're able to buy versus the price you're able to sell) for bitcoins on a daily basis seems to be very large. For instance, the bid may be 11.40 and the ask may be 11.70. If you buy coins using a Market order, your coins will be purchased at the price of 11.70.
Instead, use a Limit order and set your price at 11.45 or 11.52 or whatever price you want that's between the Bid and Ask. Your order may be filled at the price you set (it may take some time) or it may not be filled and the price will continue to run up. However, using Limit orders will save you money in the long run.
-
Yeah, exactly, I'm going to waste my time waiting for my limit order to fill -- or not fill, as the case may be -- in order to save a couple bucks on the transaction. Thanks, but no thanks for the advice, Cramer.
-
He's actually right gambino, market orders are for people in a hurry, limit orders are for those with time to spare.
They also can prevent downside risk, see here:
"Many beginner traders assume the limit order trade means to only buy a stock when it falls below a certain price or only sell a stock when it goes above a certain price. They feel that the limit order is like the autopilot function, so that if they are away from their computer, trades still go through. Therefore, the use the market order under the false belief they are making better trades, because they buy or sell right away.
However, there is one important function of the limit order that many beginner traders fail to notice. This function of the limit order is protecting the price of the realtime trade you make. There is no rule saying a limit order has to be below the current stock price. What if you set the limit buy order just a few cents higher than the current market price? You would still get in immediately as with a market order.
The limit order is not just a function to get a good price, but also to protect yourself from sudden market crashes. During the flash crash of May 2010, Proctor and Gamble's stock dropped over 30%. One trader not knowing that the flash crash was happening dumped his stock in a market order at the peak of the crash. Had he just waited a few minutes, then he would have recovered most of his losses. The solution is when you buy a stock and want to get in immediately, set the limit order a few cents above the current market price. If you sell a stock, set the limit order a few cents below the market price. That way, you can still catch fast market opportunities while protecting yourself from extreme losses."
I'd argue that Limit orders are actually more useful in a volatile market environment. It doesn't matter whether we're talking stock, commodity or currency including the B$, the same rules apply in all markets.
-
my sell orders sit there for almost a month sometimes - if coins start going down i will defiantly change though!!
-
market orders are for people in a hurry, limit orders are for those with time to spare.
That's exactly my point, pine. Almost everyone who is buying BTC for use on SR is in a hurry to get the coins to buy a listing before it disappears, or get their shit delivered for a festival, or otherwise in a hurry. So we don't have time for limit orders. We're not currency traders here; we're here to buy drugs. So for this guy to come on here and call us dumb asses for not using limit orders just shows that he is the dumb ass who can't tell the difference between a forum for drug buyers and one for currency traders. He needs to go the fuck back to the bitcointalk forum and discuss the finer points of limit orders with people who might give a shit instead of coming on here and trying to insult us.