Get Screwed by Trading A Stock With Large Spreads

The market gapped up.  I habitually wanted to take partial profit.  I did it during premarket at the parallel trend line projection which also turned out to be a pivot point as well.  Nothing wrong with that.

Now since the RSI were already above 70 on both the 1 minute and 5 minute charts, I wanted to sell if the price continued to go up without respite.  I didn’t mind holding it as a swing trade.  80 was both the 76% fib level on the 5 minute chart and a pivot level, so I figured 79.92 would be a slight discount below it to sell.  To my dismay, that limit to sell missed the HOD by 1 cent!!   I then monitor closely as I now was emotionally charged up.  The price struggled around the 20 ma on the 1 minute chart for 3 minutes and then it broke below.  I intuitively sold it at market as is the case for mental stops but that would be the correct response on stocks with small spreads.

And I was stunned that the fill was at like 30 cents below the last trade when I placed the order!  The trade didn’t even show up on the candle stick – talk about dealing with a shady market maker!!  So I was robbed by 54 cents by the market maker – instead of having the limit filled at 79.92, the market order got filled at 79.38.

Stocks with large spreads should be avoided for day trades, or similar mishaps like today would repeat and cause much pain.

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