Order Mechanics.
Reading a chart shows where the market might go, but understanding order mechanics determines how you actually enter and exit a trade.
Clicking “Buy” or “Sell” without understanding how orders fill is the fastest way for a new trader to blow an account. Before entering your first trade, let’s look at how orders work.
105.1 Market Pricing
When you look at a quote in your brokerage, you’re actually seeing a two-way auction between buyers and sellers.
- The Bid is the highest price a buyer is currently willing to pay. Sell immediately, and you’ll get this price.
- The Ask is the lowest price a seller is currently willing to accept. Buy immediately, and you’ll pay this price.
- The Spread is the gap between Bid and Ask prices.
Certain assets can have a wide spread. In that case, you will start in the red the moment you enter a position.
105.2 Order Types
New traders are sometimes surprised by how their order fills when they click “Buy.” It can feel like lag or even misinformation creates a hidden cost, but more is happening beneath the surface as millions of shares change hands digitally within seconds.
Your broker offers different order types to prioritize fill control or price control.
- Market Buy fills an order immediately at the best available price. During rapid price action, your order may not fill at the exact price you thought you acted on.
- Buy Ask fills an order at the exact price you select, as long as assets are available. If your order doesn't fill, it’s because that commodity at that price ran out while you were at the back of the line.
- Limit Orders set the maximum price you are willing to pay. Clicking Buy Ask places a limit order at the current asking price.
- Stop Orders or Stop-Loss sets an automatic position exit once a predetermined price is touched. (Jarvis Cloud assists with this.)
105.3 Trading Hours
Assets don’t trade with the same liquidity or stability at all hours, and certain securities like options are only available to trade during open market hours.
The US markets hold open hours from 9:30 AM - 4:00 PM ET, often referred to as the trading day.
The market does not hold open hours on major holidays.
105.4 Trading Checklist
Early in your trading, it’s easy to lose real money through an honest mistake. Here’s a list to help catch the details that are easiest to miss.
- Symbol match: Does the asset in your active trader match your Jarvis chart?
- Direction: Double-check the label on your security to make sure you're not trading in the opposite direction you mean to. (It's surprisingly easy to do!)
- Position size: Verify before you click “Buy” that your contract quantity is what you intend. Change the default to match your most used size.
- Position closure: Check your brokerage’s Monitor tab to ensure open contracts read 0 and all working orders are cleared before leaving your desk. A live position can be closed at its current market price with the Flatten button.
Eventually, these things become second nature. And if you make a mistake listed here, don't panic. There will always be another trade.
Ready to put your trading knowledge to the test? Start one step ahead with your free Jarvis trial.
Signals make it easy to spot trade setups, and our mods live stream daily to help first-time traders learn the ropes. There’s never been a better time to begin!