Dan Passarelli, CEO - Market Taker Mentoring

Today we are moving on to the next step, which is actually getting to executing the trade. And there's two points here. We're going to come up with an execution strategy and then then actually pull the trigger and execute the trade. So let's say we go back to the trade that we talked about in yesterday's video, buying that, selling that, and we do our analysis, of course, and we decide that it's time to make the trade.

So we simply right click create duplicate order, and we look at this, and what we want to do is we want to think, okay, how do I want to enter this? First of all, I can see that the natural offer is 560. The mid price is $0.18 below that. So if we looked at the bid, this would be about $0.36 wide. So do I want to try and trade right in the middle of the market?

Typically, you're not able to do that. I probably don't want to pay the natural offer. I want to pay something in the middle. What I'll do a lot of times is I'll just put this little blue dot to put the price smack dab in the middle of the mid and the natural. So basically 25% of the full spread with below the offer is where I put the bid.

Or if I want to work it a little bit more and just be patient with it, I would go with a lower bid, but there's a lot of risk doing that. Either way, you might have different reasons for doing different things. I also want to look at my size. I want to make sure that if I'm buying ten of these, that would be about $5,500 that I'd be investing in this. Is that what I'd like to do?

Is that the most I can lose in this case? Or do I have greater risk being an entry order? I typically leave that as a day trade, but do I want to do a GTC? Every now and then, I will actually put in the GTC entry order. We typically like to send it to the best exchange and then simply confirm and send, and that's how we execute our trade.

Now, in our next video, we're going to talk about exits and some strategies for actually exiting the trade at that point. So hang tight, and I'll see you back tomorrow.