forex-scalping.com

Limit orders promise a price but not a fill. Market orders promise a fill but not a price. For scalpers, that tradeoff plays out thousands of times.

A limit entry saves the spread, and sometimes more, since the order sits in the book and gets filled by incoming flow. The risk is adverse selection: limit orders tend to fill precisely when price is moving through them, which means the trade often starts underwater.

Market entries cost the spread and sometimes slippage, but they get a fill when the setup is live. In a fast-moving breakout, a limit order may never trigger, leaving the trader watching the move without a position.

A balanced approach often uses limits for mean-reversion setups, where price returns to a level, and market orders for momentum entries, where speed counts.

Tracking fill rates and result quality for each style in the journal shows which one pays for each setup.

Which entry style dominates here, and has the fill data supported the choice?

Market orders dominate my entries, and my fill data mostly supports it. When I tried limit entries on breakout setups for a month, I missed about a third of the trades entirely, and annoyingly the missed ones were the best runners. The fills I did get started underwater more often than not, which is the adverse selection you describe.

Where limits have earned their place is my range fades. If I'm fading the edge of an Asian range, I'd rather be paid the spread and accept that some won't fill. Those trades don't need momentum behind them, and when the limit doesn't trigger I'm usually glad, because price kept going through the level anyway.

The tracking you suggest is worth doing properly. I log filled or not filled for every limit, plus where price went in the next ten minutes. It showed me that unfilled limits I chased with a market order afterwards were my worst trades of all, so I've stopped chasing completely.