If you got your trade tracking spreadsheet, you’ll know if you’re getting lots of slippage or not. If you’re getting lots of slippage, then think about using limit orders. Thus, you’ll know, for your account size, for the stocks you’re trading, for the systems you’re trading, for your position sizing, that you’re getting lots of slippage. Since your execution is not great, you’ll start limiting your orders.
I get in and get out with zero slippage most times because I’m placing limit orders and get filled in the opening price match. However, if I use an adaptive market order, there’ll be a little bit of slippage. I happen to be free, I’m sitting at the computer anyway, so I place the limit orders, but not everyone has that luxury. If you don’t have the luxury, you don’t have the choice. Therefore, if you’re finding that you’re getting lots of slippage, you’ve got two choices, use limit orders and monitor them to make sure they get executed, or increase the liquidity requirements so that your slippage is less.
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