Stock market Queries?
I have been trading using stock simulation software for a while to learn about the stock market. I have few questions regarding the real stock market. I have total of 5 questions, i am posting 2 here, rest in a different thread. Big thanks in advance for the help. Please help
1) Sometimes my simulator won’t let me buy big volumes of certain stocks (for e.g.: yesterday I tried to buy 2000 of McDonald’s stock and did not let me, I had to reduce that to 500). Does it happen in real time where you cannot buy so many because there is not enough in the market?
2) How much time does it take to process a stock order, buy and sell? If it only takes few seconds and I knew a stock is going up, couldn’t I buy some and sell before the trend falls? I am also thinking someone can short a stock while trending down. (Provided the discount broker gives real time stock price)
I cannot test any of the above using my simulator because it takes 20 minutes to process an order.
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these answers apply in the real world, i don’t know what settings your simulator are set to.
1.) some stocks you cannot buy a large block size of, penny stocks and smaller companies. with mcdonalds, if there is an offer to sell of that size then you would be able to buy that many shares, though it is highly unlikely.
2.) well, there is an industry standard for processing orders, all depending on how you set the order up. if you issue an open or "market" order, then it will be executed immediately. buying and selling during the day to take advantage of daily price variation is known as day trading or arbitrage. you can only short stock on an "up tick" i believe, though of that I am not sure.
Partial fills can be a real headache for traders. Most trading platforms have an "all or none" option when you place your order. I’ve never used this feature because partial fills don’t cost me too much for the small trading I do. Orders are filled usually immediately.
Toss the simulation software. It is like learning how to drive a car when you are 15 by playing Grand Theft Auto. Look at your other question.
Start a fake portfolio on yahoo finance and give yourself $10,000 to use. This way you are simulating but using real world action.
It is easy to buy in real life 2000 shares of a very liquid stock like MCD. It is more difficult on stocks with smaller floats say like NYER
It takes very little time on the liquid stocks, a matter of seconds…it might take a long time on the stocks with small floats as there may not be enough stock for sale. An order imbalance if you will