Chances are you don't sit in front of the computer screen all day placing trades.
Hell I don't even do that nor would I ever want to be glued to my chair all day either. And so as traders we have to learn how to use contingent orders to help place trades while we are not around.
I know it probably sounds really cool; placing trades all over the market while you are sitting on the beach somewhere drinking a beer. While this can happen, the reality is that you have to know when to use these types of contingent orders and when not to use them.
Contingent Order Basics?
This is a very simple concept to grasp so stick with me. A contingent order is a type of order that can be placed ONLY IF certain conditions are met (contingencies). If the contingencies are met, the order is removed from the sidelines and gets placed into the market live. If not, nothing happens and the order just sits on the sidelines until you cancel it or the contingencies are met.
Like I mentioned before, it also allows you to place the order after setting your parameters without having to sit in front of your computer screen and wait for these specific conditions to occur.
A Ridiculously Simple Video Tutorial
If you're interested in learning how to use the 5 different contingency orders the right way then check out this video tutorial below. I covered everything from stop-loss orders to multiple contingent orders.
What Order Type Do You Use Most?
Add your comments below as I'm interested to see which orders are used most often! I would assume that stop-loss orders are a favorite of investors but I've been pleasantly surprised before by the readers here. Let's here what you have to say…