Limit Your Costs

It took me a few trades to realize that the commissions for market orders and limit orders were the same at Scottrade. I had been using market orders because they seemed the simplest. Limit orders are really simple too, so I always use them now. When you place a market order, you buy your shares at the current ask price for the stock and sell at the current bid for the stock, i.e. at the market price. When you place a limit order, you specify the most you're willing to pay to buy a stock and the least you're will to take to sell a stock. The only downside of limit orders is that you might not end up buying or selling if the market price doesn't hit your limit. Avoid the mistake I made early on: Constantly raising my limit price until I bought the stock. If you want to be sure you get the stock, save yourself the time and just place a market order. In those cases where I did edit my limit price, it always seemed that the original price I had set was reached later in the day, i.e. impatience can cost you!