# Question about buying shares



## Johno (3 December 2008)

Im very new to the share market and normally when I buy shares I buy them "at market" and "good for a day". This seems an easy way to do it. 

But I always miss out on the rallies at the start of the day because sometimes I cant get to my computer to buy them. Now ive noticed that when i buy "at market" there is always a gap in price by about 10c per share from the current share price on the ASX website (prolly the 20 min delay), so as a rule of thumb, how much higher or lower do you guys go at the close price of a stock, to buy them the next day? I hope this makes sense.

I dont want to go to high in case i rip myself off, if the stock is moving up.


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## mazzatelli1000 (3 December 2008)

Johno said:


> Im very new to the share market and normally when I buy shares I buy them "at market" and "good for a day". This seems an easy way to do it.
> 
> But I always miss out on the rallies at the start of the day because sometimes I cant get to my computer to buy them. Now ive noticed that when i buy "at market" there is always a gap in price by about 10c per share from the current share price on the ASX website (prolly the 20 min delay), so as a rule of thumb, how much higher or lower do you guys go at the close price of a stock, to buy them the next day? I hope this makes sense.
> 
> I dont want to go to high in case i rip myself off, if the stock is moving up.




You should try buying using limit orders


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## Johno (3 December 2008)

Yes, thats what i mean. Using limit orders. But i always worry that i will set a limit overnight but the price will rise too quick and i will miss it if you know what i mean? 

For instance an extreme case was Rio falling 30% in 5 minutes at the open the other day.


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## cutz (3 December 2008)

Why would you set the limit price overnight?, when buying a stock isn't it best to see what's it trading at when the market is open, then putting your trade through.


EDIT.>> I think i see what you mean, you what to buy on the open therefore you have to set your price above the indicative open price and the auction process will adjust it down so your trade goes through, i've never done it this way before maybe someone else can comment.

Also some brokers support market on open orders but i know mine does not.


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## dink182 (3 December 2008)

cutz said:


> auction process will adjust it down so your trade goes through, i've never done it this way before maybe someone else can comment.




So it doesn't really matter what price you put on a trade to buy in pre open? Whatever you put in, will just get changed to the average price any way. That may explain why you see people offering 20c for bbi in preopen.


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## doogie_goes_off (3 December 2008)

Yep, you get lumped in with the open price. Happened to me several times before I knew what was going on. Often now I wait for first trades to see what happens on open, also alot of people withdraw their bids at the last minute


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## kam75 (3 December 2008)

Do you have a TRADING PLAN that tells you how you should buy?  If you're new to the game, you should spend your time developing a set of rules that you can follow, that will tell you precisely when to buy, how to buy, how much to buy and at what price.  Limit Orders can be useful but Stop Limit Orders is what I would recommend using to precisely time your entries into trades.
best of luck


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## Johno (3 December 2008)

Thanks everyone....It seems on open, if the market is rallying, theres a massive rally right at the start and i always miss it. By the time ive sat back and looked at whats going on, its all over and sometimes on the way back down again.

This is why i wanted to know how to set up a buy (or sell) pre-open.


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## So_Cynical (3 December 2008)

Johno said:


> Thanks everyone....It seems on open, if the market is rallying, theres a massive rally right at the start and i always miss it. By the time ive sat back and looked at whats going on, its all over and sometimes on the way back down again.
> 
> This is why i wanted to know how to set up a buy (or sell) pre-open.




If your expecting XYZ to rally (then everyone else is to)...and it will usually gap up at 
the open then fade away during the day....if u buy at market, there's some chance you 
will get in at near the days high, and thats prob what u want to avoid....perhaps look 
for a longer time frame or study the SP channel/range and be patient with a limit order.


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## cutz (4 December 2008)

dink182 said:


> So it doesn't really matter what price you put on a trade to buy in pre open? Whatever you put in, will just get changed to the average price any way. That may explain why you see people offering 20c for bbi in preopen.




If your bid is lower than the open price it won't go through, if its higher it will get adjusted down, if your ask is higher than open price it won't go through if its lower it gets adjusted up, ie.it will not get adjusted to your disadvantage.

This is how i see it but for exact info on the preopen check out the preopen thread in the beginners section.


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