A Sad Tale

by putting the limit order in which usually fills you get to save some money. but may lose out if it goes up from where you started it. but i like them because i dont want to sit in front of the screen and mwait for the best price. alot of times i am willing to buy at x but not at x+1/2, so i put in a limit order and walk away and do something i like. plus it makes you feel like you got a bargain if you get in a little lower than the ask.

If you bid 1% below the last trade of a stock with 5% daily volatility, there's about a 90% chance you'll fill by the end of a complete trading day. ... You have a 37% chance of trying this 10 times and filling every time; you have a 5% chance of trying this 30 times and filling every time. Is this in the ballpark of the number of trades you're talking about?


The reason the 1% you "saved" is an illusion is that in the long run, you will not fill 10% of the time, and those missed trades will outperform the ones you filled by about 9%.