If you read Mark F in his book, Oscar V, Baron R, etc they are all good at singing the praises of EDT execution systems. But they totally avoid risk management, which is much more important to me than the big gain.
That's nonsense. I have no clue where you got that from.
SOESing out in a turning market is a sure way to slippage, isn't it?
Slippage is certainly possible with a SOES market order. ARCA market order too. But that's the nature of market orders in general. YOu are trading the certainty of a fill for the uncertainty of price.
Slippage when it comes to limit orders just depends on what price you entered the trade. Assume a stock is trading at 10 x 10 1/8. You place a bid through ISLD at 10 which gets posted to level II. Along comes a seller and you get filled. If the stock died and didn't move like you thought it would, you could easily get back out at 10 using the execution system of your choice. In that case, there would be no slippage because you bought at the bid. That capability of being able to buy at the bid and sell at the offer using an ECN is what helps day traders eliminate the slippage that's inevitable with SOES.
But I need to know I can take out another trader's bid when I want to. Can I do that with electronic day trading or not?
Yes, of course. But if you wait until everybody and their brother is trying to get out at the same time, don't expect to take out the best bid every time. When a stock breaks a key support level, there might be 50 or more traders trying to get out at once, and they all are trying to take out the same two or three bids. The math on that tells you that a bunch of people aren't going to get a fill.
No electronic execution system is going to get you out at the best bid promptly if you get beat to the punch by other market participants.
Baron Robertson
Editor and Publisher
Elite Trader
www.elitetrader.com
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