Yesterday I spent the morning buying in. That in itself violated one of my rules, which is to be wary of the Monday morning rush. I paid the price as the market took off till lunch and then the buying dried up…Oh well.
I have learnt a big lesson from the market recently that is worth passing on so here it is:
Many buyers keep their bids secret and off market, particularly the bigger institutional buyers and brokers working on behalf of clients. In large companies this isn’t an issue for us little guys but in my small cap gold universe it makes a huge difference.
Up until recently I would put in bids just below, or above, the market hoping for a flick back to my level. This needed me to be on the ball through the day, but when I am working at my job this is not that easy. I would also have to feed many lots into the market for fear of pushing the price too far at once.
Recently I learnt by accident how to flush out these hidden buyers and sellers. If I put in an order to buy(or sell) “at market” instead of a specified price, the computer brokering software will give me an estimated price for the total purchase. This flushes out the hidden buyers and sellers and I can simply see what the price is per share and know how far off the stated market price my purchase will be. Its that simple.
Since discovering this it has been far less stressful buying and selling as I am not waiting for a visible seller or buyer at the other end to give up and come down, or up, to my price.
I hope this helps you in your trading.