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Techniques on Entering Orders for Buying and Selling Stocks - Video and Transcript

This video offers expert techniques for entering orders for buying and selling stocks. Robert Knight, MBA, is the Head Trader at and has more than 35 years of experience in trading. In this video, he uses the $SRRA (Sierra Oncology Inc) chart as an example for entering orders. A transcript appears below the video.

It's January 25th, 2022. This is a talk on where we put our orders in, both buying and selling stocks. And I'm going to try and talk about fast-moving stocks and ones that you have more time on.

This morning, this is the SRRA. [It] had a big spike in the pre-market up to 30 and then pulled back to 20, opened at 24, sold off, and then it started to pop.

...I've talked about this pattern before, where, this type of opening, where it gaps up strong in the market and then sells off sharp at the opening. And this is sort of where the amateurs are trading. They get whacked out. The people "in the know" wait for the pullback.

And here's your first pullback entry, up right here. Twenty-three. Now you had to be very quick to catch this. So the question is, this one is treating with a 7-cent spread. So on a stock like this, if I want to buy this, but it's moving very quickly, I do one of two things. Well, I never put in a market order. It's too dangerous, especially with a 7-cent spread. But what I might do is, if I get a signal, okay, here's my $23 entry. I'll put in an order. All of my orders ready. And I just saw that I just need to push the button and I'll have an order step, maybe 23.05, maybe 23.10. And then when I see it break through my buy order level at 23, then I'll push the button.

So I have a 10 cent slippage. So I'll get filled somewhere between 23 and 23.10. If I miss it and it moves past that and goes, and then I've missed the trade. I don't chase it. I don't try and go after it again. You set your area that you want to buy. If you don't get it, then you go on to the next trade. You don't chase the stocks.

Because what if you chased it to 24 here and then it pulled sharply pulled back to 23 and a half. And you think, oh crap, I bought this and it's going to sell off. I'd better get out of it. And so you could get whipsawed. So the key is, if your...optimum entry is 23, then you have your order ready with a 5 cent slippage, a 10 cent slippage, 23.10, put it in. You'll get filled and you could've caught the top.

Now, this brings in another question here: then it's halted. What do you do now? ...Typically, if you want it to take some profit in here, you could put the order in...just below the offer. Before it opens, you could put it in just below it or just above it because in all likelihood, when it opens, it's going to spike or drop some before it goes.

In this case, it did spike. Now, if you had put the order in too high above it, you wouldn't have got filled, but it was halted at 25.44. So I've maybe put the order in [at] 25.50 or 25.60, or maybe even down here at 25.35. And so when it opened and it opened higher, I would have got filled at the 25, cause this is where it opened, at 25.60.

So even though I had my order in at 25.30, I would have got filled at the 25.60 level. And if I won...on the first halt, I'd be looking to piece a little bit out if I had bought this at the 23 area, 23 and change. And then when it came off, but when it's dropping like this, you need to just, you do need almost just to mark it out, or put in an order. Say it's dropping and you want to stop it at 25. So you put in an order 24.70. And you should get filled. If you miss it, well, that's one of the problems with trading these kinds of volatile stocks. You have to be ready to trade them and maybe have hotkeys to get out in time... I have a panic button and it's a 20 cent slippage, so it puts it in at the bid plus 20 cents.

And so you probably would have got out of this trade by doing that. So you put it a little bit in just below or just above where it gets halted. If you want to get some off. And then if it opens spiked up, you're in it. And if it spikes down, you have to be ready to bail, hit your panic button.

So that's if the market's moving very quickly. Those are some ideas. If it's a slower move like in here, and it's starting to move up a bit, but it does have some range, you know, 20, 30 cents range. I find out ... what I'm looking for for an entry level ... so then I would put my order in, maybe on this here on the cross over .... around 22.15, I'd just be on the bed. Or let's see, if it pulled back in here and I was looking to buy some, I'd put it in around where these moving averages are. The 34 period and the 50 period. And just go on the bid because on the platform I trade with, if I buy on the bid, I don't pay any commission. If I buy on the offer, I pay half a cent. So I pay a penny round trip. ... If I buy in the offer, sell on the bid, I pay a penny round trip. If I just bid for it, I don't pay commission.

So, depending on where it is, this one has a pretty big spread here. It's tightened up a penny, but it does 7 - 8 cents sometimes. So you just look for your optimum entry-level for this stock. In a pullback, maybe you're thinking, okay, it's going to trade back to 23.

So I'll put a bid in a 23, maybe 22.95, in case they sell it off by half at 23 half at 22.95, which is the 50-period moving average. And you don't play from there. And then if it goes against me, I got to stop out at 20 - 22.75. So I'd have my sell order ready for that. So if I saw it starting to go, it looks like it might trade, I would be in here at ... 22.95, I put my order and get the bid. Cause it was trading up here at over 23. I got filled at 22.95. And then, we'll just see how it plays out. I'm not saying that this is a stock I'm trading ... hypothetically, this is where I would put my order.

It's in a rising channel like this, that's coming into the apex of a wedge. Well, maybe this is the wedge now, like this.

So I wait for it to pull back. I put my entry in my ordering. I get filled. Now, if it's moving quickly, then ... you can buy the breakout. Now, in soft markets like this, seldom do I try to buy the breakout, because you get too many fake moves. You're better off to try and buy it at your risk level.

And this is your risk level here. The 22.95 maybe. Maybe your risk level is here: 22.85. So you put your order in a 22.95, stop it under 22.85. Cause that's the risk level you're prepared to take and then look to sell some out. And then if it really starts to pop here, you can offer the stock at 23.48.

Now, quite often, I'll penny dig. I know that 23.50 is going to be a natural resistance. 24.24 is going to be natural resistance for it. So if I'm looking at this, the stock is trending up and I'm looking to sell some. Then I'll offer it at 23.48. And then you'll see a lot of sellers at 23.50.

So you've penny digged. 23.47, 23.48. You'll normally get it off quite often up here. I'd offered it between 23.96 and 23.98, depending, maybe 23.93 and 23.98, depending on how fast it's moving and you'd be surprised often you get filled when you do that. But if you don't and it starts to roll over, you need to cancel that order and put in your next order.

Hit the bid with a five or 10 cent slippage. So there are some techniques that you can use if it's moving fast, put in some slippage. If it's halted, put it in, or if you want to sell some, put it in around where it was halted in that area and just get what you get.

Then if it's quiet, as the market's quietened down, it's coming into the range [where] you want to buy it, then just go on the bid, and hope for it. But if it starts to move, then you've got to go on the offer, just buy it on the offer, but don't chase it. That's the key.

Don't chase it. You just buy it on the offer. If it's a small spread, penny or 2, 3, 4. If you start getting a 10 cent spread, then you have to go on the bid because if you go on the offer, all of a sudden you're down 10 cents already. Yeah, that's a big part of your risk. So the tighter the spread, ... the easier it is ... to buy it on the offer, sell it on the bid.

If it's just a penny spread and it's a half a cent commission for me, I just hit the bid. Get out. You just get it done. [...]


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