VangelisModerator01/14/2015 at 2:41 amPost count: 162
The recommendation is to trade on the 2nd trading day of the month and buy/sell at the open. This is not a strict rule. If you trade at another (near) day or time sometimes you will do better sometimes worst. It should even out.
The logic for using the 2nd day is that:
a. For the BUG, backtests show a slight benefit vs using the 1st trading day of the month.
b. You get more than plenty of time to place the order.
c. If you are using other strategies that trade on the 1st, you may split orders across two days. Assuming of course you have the time to do so.
You may use a “market on open” order if your broker provides one. You may also want to trade at the close using a ‘market on close’ order. If that means participating in the exchange closing auction, that is fine. If using IB (interactive Brokers) that translates to an OPG order for the open and a MOC order for the close.
If you place the trade manually, it’s good practice to check the bid/ask spread and if it is satisfactory, place a limit order at the ask.
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