~1~Those orders may be selected basing on several criteria, the most used is for “closest orders to current price”. It’s important to know that price only forms when deals are done. The price difference that separates the lowest sell order(s) from the highest buy order(s) is called bid – ask spread or just spread. Spread plays a major part in traders’ profitability and along with the risk of stop loss and broker’s fees is what makes “coin toss” trading unprofitable. Traders must employ expecially crafted trading methods to give them enough of an “edge” to make up for the natural loss deriving by the above listed factors. A ballpark number for traditional trading methods is 65-75%. Any less than that puts long term profitability in jeopardy.
Markets
~1~Those orders may be selected basing on several criteria, the most used is for “closest orders to current price”. It’s important to know that price only forms when deals are done. The price difference that separates the lowest sell order(s) from the highest buy order(s) is called bid – ask spread or just spread. Spread plays a major part in traders’ profitability and along with the risk of stop loss and broker’s fees is what makes “coin toss” trading unprofitable. Traders must employ expecially crafted trading methods to give them enough of an “edge” to make up for the natural loss deriving by the above listed factors. A ballpark number for traditional trading methods is 65-75%. Any less than that puts long term profitability in jeopardy.
Comments