Shadow Vega – How to place orders

We want to make sure that you profit from the trades in the way that you should.  Just because you have a good strategy, does not mean that you will execute the strategy correctly. Execution is an important part of this. Part of that is understanding how to place your orders for both entering and exiting the trades.

Overall, it is very easy. So, whether you’ve been an active trader or you’ve never really placed ETF trades before, you can do this!

Our simulated results are based on entering and exiting the ETF at the open on the first trading day following the signal’s appearance in the nightly signal table.

It does not matter what broker you use.

For Buy Orders

Place your orders by entering a buy order for the number of shares you want to buy for the opening. You can enter these orders before the market opens and at most brokers, even the night before. Most brokers will allow you to place a “Market on Open” (MOO) order which specifies that you want to complete your order as soon after the open as possible, at whatever price is current at that time. In most cases, the result will be that your order is filled at or very near to the opening price of the day.

For Sell Orders

You exit the ETF the same way that you enter, except that you place a sell order rather than a buy order.

You NEED to place both the buy orders and the sell orders at the SAME time. The reason is that the proceeds from selling one ETF will be used to buy the new ETF.

Also, you MUST have a margin account to place these orders, even though you are not borrowing any money on margin. To get out of a position and use the money for a new position on the same day, a brokerage requires a margin type account.

Other Options

Some people prefer not to enter or exit at the open. Some other options include

• Placing the orders manually shortly after the open
• Using TWAP order type
• Using another algo method that is offered by your broker

 

If you have any questions, please write us so that we can clear them up for you.

Thank you,

Matt & Cesar