Trader Tip: Trader “Best” Practice, Order Book Recently I had gone shopping at my local grocery store. Generally I have a pretty good idea how much I have spent as I go through the story picking out items and putting them into my shopping cart. Sure I am never exact, but maybe within 10 to 20%. No, not this time I was thinking the bill would be around €25, but instead it was near €40. How could this be? Surely there must be something miss-marked.

With other customers behind me anxiously waiting, I started a quick investigation, as I know once you pay and leave the store, it is more or less final. Turns out, a discounted item was not discounted for the size purchased and a item was miss-placed on the store shelf making me believe it was the cheaper item. I did not pay too close attention. This story is very similar to how we see a lot of traders trade. The quickly buy and sell instruments, not really paying attention to what is happening in their order book. Days and sometimes weeks pass, and they are surprised at the results and cry, “this can’t be true.”

So … incomes the ticket to the BPT Support desk. A trader might say, I made hundreds of pips last week and I don’t see them in my account. It must be wrong. The response goes back … can you tell me which ticket number on which trade is wrong? I don’t know you check it. This is a little bit like me yelling at the cashier in the grocery store, on my bill being too high, without specifics. With a high transaction rate as in a grocery store or in trading, it is really up to the trader to point out the specific errors, or you will not go far. This brings me to the point of this article and a practice you should religiously follow:

Trader “Best” Practice says, after each trade manipulation validate your order book for correctness. If not correct, take immediate remedies.

Is it possible that there are errors? For sure. But more often than not, the error is in what you believed you did vs. what you actually did. For example, going short not long, limit order that never gets hit vs. market order, traded the wrong instrument, traded the wrong account, limit orders not at the price planned, or your platform was not in a stable environment and the trade never actually made it to the broker. Often “rabbit” traders that make many trades in short periods of time lose track of where they are at. Time passes and they can not believe the trading results.

Still other reasons could be that the broker did miss handle the trade and it was rejected, due to a system error. But remember, trading over the internet has risks, and you must accept these risks as a serious professional trader. Google key words like “NYSE outage 2017, 2016, etc…” Broker and exchange outages happen regularly. System outages rarely will cause a broker to make trade alterations. Certainly, no “opportunity” cost losses will be considered.

All this being said, there are the rare cases, where a trade was clearly miss-marked. In these cases, you will need to provide the broker with an extreme level of detail. For example: ticket numbers, date-times, price screen shots and a reasonable rationale why you think the trade was wrong. The error must be obvious. Orders miss placed, connectivity issues or “good” intentions are not obvious.

But all this can be avoided by simply managing and reviewing your order book real time. If you complain weeks later about your order book you have not been paying attention. Most likely this will also be reflected in your overall trading strategy and results. Discipline to this detail is the only way to be successful in trading.

Click here to watch a short video presentation on this Trader Tip, or watch below.

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Trader Tip: Trader “Best” Practice, Order Book

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