How do I place test order/trades, and why would I want to?
First, what is a test order? ==> Nasdaq has set up several test stocks which are 100% fake stocks and only exist for the sole purpose of testing your systems, etc. Three of these securities are TESTA, TESTB and TEST.
You can use these test stocks to place SOES orders, SNET orders, ECN orders, etc. You can also see Level II displays for these 'stocks' and 'execute' against orders that are on the Level II display. In short, you can do everything with these stocks that can be done with a real stock (except generate a margin call or make/lose real money).
There are many reasons why a daytrader might want to use these securities. Personally, I place a few test orders every single day before placing any real orders. My purpose is to verify that my brokers systems (SNET, SOES, ECN) are fully functional before I get into a real trade. Once validated, I can eliminate one source of problems for a real trade. This is particularly important if you are placing any order premarket, when your broker has an increased likelihood of not having all of their systems up and running.
Test securities are also an excellent way to test the mechanics of how to place the various type of orders using your system. It's a great way to practice... Quick, SOES the bid to cover on 500 shares... Post an ISLD bid at the inside market minus 1/4 point... Preference HRZG on the offer, fast! Fun stuff, good practice, and never lose a dime in the process. If you are new to daytrading, this kind of practice might help you get comfortable with how to use your Real Tick III system, CyberTrader system, JavaTrader system, or whatever system your broker provides you. |
