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Why The Heck Wasn't My Order Ful-filled? Slippage Can Cost You Money... - YouTube
Channel: Timothy Sykes
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- So in this video we're
gonna talk about slippage.
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It really matters when you're trading
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these hot penny stocks, stayed tuned.
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(upbeat music)
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What's up, Tim Sykes,
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millionaire, mentor and trader
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here answering your questions.
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I love getting all these questions.
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I just film these videos
and I try to help you.
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And it helps myself too 'cause I get,
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frankly, too many questions,
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the same ones over and
over and over again.
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Click the link just below,
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I'm gonna give you a very cool book.
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The link is gonna change your life.
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This one book has all of my
most important rules in it.
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It's called "The Complete
Penny Stock Course".
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If you've already read it,
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read it again.
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If you have it in paperback,
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get it on Kindle.
[46]
If you have it on Kindle,
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get it in paperback.
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If you have it in Kindle and paperback,
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get it on Google Play.
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It is so, so, so useful.
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You need to have this
knowledge before your risk
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your hard earned money.
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Today's question is
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when is there slippage,
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like when you put in your order
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and maybe you don't get filled
or you put in your order
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and you get a really bad fill?
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That's bad, that costs you money,
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right, that's slippage.
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Also enter a comment underneath here,
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have you ever put in an order before,
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yes or no?
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I'm just curious to see how
many of you guys are trading,
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whether it's an order for a
1,000 shares or a 100 shares,
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have you ever entered a stock order?
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I'm curious and you have
two choices when you put
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in an order,
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market order or limit order.
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If you've read my book,
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if you've seen my video lessons and DVDs
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you know never to use market orders.
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No stock is ever good
enough or so amazing enough
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that I need to just say,
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hey, to the market,
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I'll buy in at any price.
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No, you have to use specific limits.
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If a stock blows through that limit,
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if it goes up too fast I'm fine, I'm fine,
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willing to miss it, okay.
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If you're willing to miss a trade
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that's actually a good thing
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because it makes you more conservative.
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Too many people are too aggressive.
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They get so excited about
a pattern or some news
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or a stock and they're just like,
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I'm gonna buy it at any price.
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I can't wait,
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let me do this, market order.
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And I know a terrible
broker like Robin Hood
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uses market orders.
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You save like like five
or $10 on commissions
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and then you lose hundreds of dollars
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on a terrible execution.
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It doesn't make it good.
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Watch out for those schemes.
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Watch out for market orders.
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So for me I use limit orders
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but then again that begs a question,
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what if the stock blows through it,
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if you're trying to buy a
stock and it goes too high?
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What if you're trying to sell
a stock and you put a limit
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and it blows right through
it and then what do you do?
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I get this message all the
time from people saying,
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"Hey Tim, I'm trying to
follow rule number one
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"and cut losses quickly but
I can't cut losses quickly
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"because the stock is moving too fast."
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You have to be more
prepared ahead of time.
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If you're trading a very volatile stock,
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which we trade penny
stocks, they're volatile,
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you need to be anticipating
the stock could blow
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through your limit and then
you need a backup plan.
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It's all about planning, okay,
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I never want you to just
sit there with your money
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on the line sitting there
like a deer in headlights
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being like I don't know what to do,
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I don't know what to do,
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the stock is moving.
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I'm losing more. I'm losing more.
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Oh my God.
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Or even if you're making
money and you're like,
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oh my God,
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I'm making so much money what do I do?
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Do I hold? Do I sell?
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What do I do?
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Oh my God.
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You need to take emotion away from this
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as much as possible.
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Obviously we're all human
so there's gonna be emotion
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but if you have a plan and a
backup plan that usually helps.
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So for me,
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I'll give you an example.
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This morning I made about $1,500
before I filmed this video.
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I was in this stock overnight from $2,90.
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It had closed at like $3,10.
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WNDW was the play.
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It was gapping up a little
bit but not that much.
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There were other stocks that were falling.
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A lot of momentum stocks
yesterday were spiking
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into the close so I was in one of them.
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The other ones were all down 15,
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20% to start.
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Mine was kind of unchanged,
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maybe up a little.
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But because those other ones were down
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that made me more conservative.
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If other ones kept spiking then I might
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be more aggressive today
but already I'm thinking
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about the other stocks and I'm thinking
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about how that's gonna impact my play.
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Because often times you have these days
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where all the morning spikers just fail,
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for whatever reason,
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and you have to accept that.
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So when the stock opened
it was $3,18 by $3,19.
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Remember, I'm in at 2,90,
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so I'm up 20, 30 cents a share,
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roughly 10% on my overnight
position of 5,000 shares.
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That's a good profit, okay,
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that's how I make a 1,000,
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1,500 a day.
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1,000, 1,500 a day
keeps the real job away.
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So for me,
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I don't care whether I'm selling it
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at 3,18, $3,20,
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$3,15 or even $3,10.
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I just wanna lock in the
profits because the other stocks
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are not spiking and in
case you ever follow me
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like on a first green day,
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I'm usually selling the very next morning.
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You follow my rules,
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this is like one of my classic patterns.
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So when the other stocks are not spiking,
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in fact, dipping quite a bit I'm thinking
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about selling this one.
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So what do I put my limit at?
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Remember, I'm not using my market order.
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I don't trust these market orders.
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I'm trading in OTC stock where
there could be some slippage.
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Slippage is like where you put in a price
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and the stock moves too
fast and then maybe you
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get it executed at a different price.
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Wow, that price just
slipped like seven cents.
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So at 3,18 I obviously wanna sell it
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'cause there's a buyer there
right at the market open.
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But I don't know if I'm gonna get $3,18.
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So I don't care whether
I sell at 3,18 or not.
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I put my limit at $3,10 because
there's also some bidders
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at 3,16, 3,15, 3,12 and 3,11.
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So I figure if I sell it at
3,10 I still make 20 cents,
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or that I make 20 or 28 cents a share,
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it doesn't matter.
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I'm willing to give it a little time.
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The good news is I got filled
right near the market open,
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sold it at 3,18,
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presto, chango, very easy.
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Right now as we're filming this the stock
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is hanging around three.
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So I'd still be up but again,
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I don't care about those
eight cents a share.
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I gave the market maker a little leeway
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of eight cents a share just in
case the stock was gonna dip.
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If it did dip to,
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let's say, 3,10 and I
still hadn't been filled
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I probably would change it.
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If let's say it was at 3,12
and in the first few minutes
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I'm still not getting filled on OTCs,
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I have enough preparation,
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I haven enough experience
knowing that OTCs
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are a little tougher to get executed.
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So if it is fading 3,12,
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3,11, 3,10 and I'm not getting executed
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I'm not waiting for the
bid to take out 3,10,
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I'm changing my order to a limit of three
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just so that I protect.
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If you're in a trade overnight, again,
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for me I don't care
whether I make 30 cents,
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20 cents or 10 cents,
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I'm just trying to lock in the gains.
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The other stocks that I was
thinking about going long
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overnight were down 10, 15, 20%.
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So for me to even be up or
for me to even break even
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I chose the right play but
I just need to lock that in.
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This is what I think a lot
of you guys need to do.
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You need to think not in
terms of how much money
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you're gonna make overall
but just trying to capture
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the meat of the move.
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And whether you have a few cents
a share of slippage or not,
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it's okay because these
are fast moving stocks
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and you need to learn to lock it in.
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So for me it's about being
better safe than sorry.
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So I'm almost always using
an extra few cents a share
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and you have to judge each stock,
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what is the slippage potential?
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With OTCs, when you're selling,
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especially near the market open,
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especially on as stock,
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the stock was up 50% yesterday.
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So the first green days
theoretically it should
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have been a bigger gap up.
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It should have had some
nice buyers but it didn't
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because the whole momentum
market is kind of stalled today.
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So I accept that reality
and I put in my order.
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If those other stocks,
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let's say, were up 20,
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30% and this one was
gapping up I might give it
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a few extra seconds,
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a few extra minutes to see
if it can morning spike.
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So there's no one right answer
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like should I always use
my limit order seven cents
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below the current price?
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You have to judge what
the market is doing,
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what you think this stock is gonna do
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and then you put your best guess.
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Just don't try to necessarily
get the exact price
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that a stock is at.
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I find a lot of people,
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they don't wanna give
up even a penny or two.
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So if they wanna sell at
$3,18 in this example,
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they'll put their limit at 3,17
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and they'll be like,
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I'm capturing all my money.
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And then the stock busts
through their limit
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and then they have no backup plan.
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So for me,
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I want to give it a few
cents a share of slippage.
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It's okay, just try to
lock in the profits.
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And if you're in a stock that's fading
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and you're trying to cut losses,
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especially if it's a volatile stock
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you wanna cut losses quickly,
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you cannot just put yourself
at the market with no plan.
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Always have a plan.
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Consider the different
options and trust me,
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it gets easier over time.
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Experience pays the most so
you need to keep learning.
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If you're not ready to
trade with real money,
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these stocks move fast,
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use stocks to trade paper money, okay.
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I'm gonna include a link.
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I'm gonna include a
special offer just below
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if you wanna use stocks to
trade and that way you can test
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and you can practice, cheers.
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Hey, Tim Sykes,
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millionaire, mentor and trader.
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Thank you for watching my videos.
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I hope that they help you.
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I wanna share everything that I've learned
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over the years.
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You can check out more
videos right over there
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and also click subscribe
so that you can watch all
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of these videos,
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get that knowledge and become
my next millionaire student.
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