Trade in a glass of quotations
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Glass quotations and types of applications
The rapid development of computer technology and the widespread Internet greatly simplified access to stock trading. Thanks to modern technology through trading terminals millions of investors receive all the necessary information and carry out transactions on the stock exchange in real time. An investor may place an application, ie, order to buy or sell an asset anywhere in the market, and if he did it right, the broker has the right to refuse him in the commission of the operation. Therefore, for investors it is important to know what are the commercial applications and how to use them correctly.
There are three kinds of commercial applications, and as a result, three possibilities for opening and closing transactions in the market - the market, simulated and contingencies.
Market-based applications allow you to open and close positions in the so-called market price. This figure consists of two elements - the best market price for the purchase of so-called «Bid», and the best price for the sale of so-called «Ask». It is for these price traders are prepared to buy or sell at a given moment. If you look at a glass of quotations for each instrument, the market price, it is cut green and red glass fields.
The upper green line, the most expensive quote for the purchase, and the bottom is red, the cheapest for sale, if traders comply with these prices, they can make a quick purchase, or a quick sale on the market. It is important not to get confused when buying on the market, we have one who sells at the moment cheaper than all, and sell on the market to anyone who is ready to buy at this moment more than all.
The next type of applications "limited" - they specify the exact price performance of these applications "limit". Such requests can be placed in the exact locations of the market. Green field quotations cup is all traders who want to buy at a price lower than the current at the moment the market price. Placing limited order to buy at a price lower than the market, we just get up in the queue and wait for the market will not price indicated in our application. If the limit order for the purchase will be listed above the market price, this application instantly becomes market and the broker will start to buy on the market the amount of lots, which was indicated in the application, but not higher than the limit specified in the application. Red box quotations cup is all traders who want to sell at a higher than the current at the moment the market price.
The latter type of applications - "conditional requests". Suppose that we want to give an order to buy at a price above the market, or to sell at a price lower than the market - limited applications for this are not suitable, they will work immediately. In these cases, use "conditional requests", they consist of two halves. The first part of the application, this condition, the terms of the price can be any. As long as it does not appear on the market, nothing happens. The second half of this application is actually executed. If the price appears on the market conditions, the first part of the application launches a second, and then open a position in the market in the manner specified herein, or a limited market. Such orders can be used, in addition to opening a position as orders Stop-loss, to limit the loss on the transaction.
Making trades do not forget that your presence in the market is worth the money. For each operation you will have to pay a commission to the broker in the first place, their value depends on the amount of transaction, as well as the stock exchange and the depository. Furthermore, it is necessary to consider slippage, if the position is open at the market price. The fact that the acceleration of the market price step can dramatically expanded, and the price of entry into the market may be much worse than the one on which you expected.