In this article, We learn about "Good-Till-Cancelled (GTC)".Let's Go!
Good-Till-Cancelled (GTC) is a trade order type that remains active in the market until the trader decides to cancel.
This type of order is useful for traders who want to maintain open orders for a long period of time without constantly monitoring and adjusting their trading strategy.
Let’s explore the concept of good-til-cancel orders, their functionality, and the pros and cons of using them in a trading strategy.
What is valid before canceling the order?
A Good-Till-Cancel Order, or GTC order, is a trading order that remains active in the market until the trader manually cancels the order or the order is filled.
GTC orders can be used with multiple types of orders, such as limit orders and stop orders, allowing traders to execute trading strategies on longer time frames without the need to constantly monitor the market.
How did it look before canceling the order
When placing a GTC order, traders specify the type of order they wish to place (such as a limit or stop-loss order) and the price level or conditions under which the order should be executed.
Once an order is placed, it will remain active in the market until the specified conditions are met and the order is executed, or the trader manually cancels the order.
Benefits of Good Till Canceled order
- Time Efficiency: GTC orders allow traders to maintain open orders for longer periods of time without having to constantly monitor and adjust their trading strategies. This saves time and reduces the stress associated with active trading.
- Flexibility: GTC orders can be used with a variety of order types, providing traders with the flexibility to execute trading strategies over longer periods of time and adapt to changing market conditions.
- Discipline: By using GTC orders, traders can maintain a consistent trading strategy and avoid making impulsive decisions based on short-term market fluctuations.
Good Till Canceled Order Disadvantages
- Forgetting: Because GTC orders remain active until manually canceled, traders may forget about their open orders, which may result in unexpected executions and losses.
- Market Changes: Market conditions may change significantly over time, making GTC orders less relevant or potentially adversely affecting them. Traders should regularly review their open GTC orders to ensure they are consistent with their current trading strategy.
- Broker Policies: Some brokers may have specific policies regarding the duration of GTC orders, which may limit their usefulness for certain trading strategies or require traders to resubmit orders periodically.
In conclusion, good-til-cancel orders provide traders with an efficient and flexible tool for executing trading strategies over an extended period of time.
GTC orders remain active until manually canceled or filled, helping traders save time, maintain discipline, and adapt to changing market conditions.
However, there are some potential downsides to using GTC orders, including the risk of forgetting, the need to periodically review open orders, and potential restrictions imposed by broker policies.
In order to mitigate these risks, you should carefully consider your trading strategy, market conditions and broker policies before using GTC orders, and you should regularly monitor your open orders to ensure that they are in line with your current trading goals consistent.