Learn how GTC orders can automate your trading, save time, and help you lock in target prices effectively.
GTC (Good-Til-Canceled) orders are a simple way to automate your trading. They stay active until filled or canceled, saving you time and effort. Here's what you need to know:
- What They Do: Keep buy/sell orders active for up to 30–90 days (or longer, depending on your broker).
- Why Use Them: Ideal for long-term strategies, profit targets, or after-hours opportunities.
- Key Benefits:
- Automates trades, reducing daily tasks.
- Helps lock in target prices without constant monitoring.
- Works well for both active and passive traders.
- When to Avoid: Avoid GTC orders during high volatility, corporate actions, or if you frequently adjust your portfolio.
Quick Comparison:
| Order Type | Duration | Best For | Execution |
|---|---|---|---|
| GTC Order | 30–90 days (typ.) | Long-term positions, targets | At a specified price |
| Day Order | End of trading day | Short-term or intraday trades | At a specified price |
| Market Order | Immediate | Quick execution | Best available price |
To use GTC orders effectively, set clear price targets, review regularly, and leverage tools like price alerts to stay updated. They’re especially useful for disciplined, long-term trading strategies.
Day Order Vs Good Till Canceled Explained
GTC Order Advantages
GTC orders simplify trading by automating key tasks, making them a solid choice for both active and passive traders. They save time, help seize market opportunities, and ensure orders are executed at the desired price points. Let’s break down how these benefits work in practice.
Time-Saving Benefits
With GTC orders, you no longer need to place orders daily. By setting entry and exit points that stay active until executed or canceled, you can focus on analyzing the market and planning strategies instead of handling routine tasks. This is especially helpful when managing multiple positions.
Capitalizing on Price Moves
GTC orders remain active through all market conditions, allowing traders to act on price shifts automatically. For instance, when ACADIA Pharmaceuticals surged after a patent win, a GTC sell order at $27.00 locked in profits from a $21.50 entry point without manual intervention.
Comparing Order Types
Here’s a quick look at how GTC orders stack up against other common order types:
| Order Type | Duration | Execution | Best For |
|---|---|---|---|
| GTC Order | 30–90 days (typ.) | At a specified price | Long-term positions, targets |
| Day Order | Expires end of day | At a specified price | Short-term or intraday trades |
| Market Order | Immediate | Best available price | Quick execution |
For example, an Affirm investor placed a GTC buy order at $40.00 while the stock was trading at $44.00. Weeks later, when the stock briefly dipped, the order executed at the desired price, ensuring disciplined entry without constant monitoring. This kind of automation helps maintain focus and consistency in trading strategies.
Using GTC Orders Effectively
GTC orders are a helpful mechanism for traders looking to maintain discipline and focus on long-term goals. They allow you to set specific entry and exit points, reducing the need for constant market monitoring.
Top Uses for GTC Orders
GTC orders are ideal when you have a clear price target and are willing to wait for the market to reach it. They're particularly useful for long-term strategies and for trading stocks with lower liquidity, where price movement may take more time. Here are some common ways to use them:
| Strategy | Application | Tips for Success |
|---|---|---|
| Long-term Position Building | Buying during planned dips | Base your target price on in-depth market research |
| Profit Taking | Selling near resistance levels | Place sell orders close to resistance points like 52-week highs |
| Stop-Loss Management | Reducing potential losses | Set sell orders below the current price to minimize downside risk |
| Trading Less Liquid Stocks | Allowing patient execution | Be prepared for slower execution when dealing with low-liquidity stocks |
While these scenarios highlight the benefits of GTC orders, there are times when other strategies may be more effective.
When GTC Orders May Not Work
GTC orders aren't always the best choice. Here are situations where they might fall short:
- Corporate Actions: Events like stock splits, mergers, or dividend payouts can disrupt order execution.
- High Market Volatility: Rapid price changes may cause orders to fill at less-than-ideal prices.
- Major News Events: Significant announcements can quickly alter market conditions.
- Frequent Portfolio Adjustments: If you need to rebalance often, the long-term nature of GTC orders may not align with your strategy.
How to Set Up GTC Orders
Here’s a quick guide for setting up GTC orders on Interactive Brokers' TWS Mosaic:
-
Initial Setup
Select the stock you want to trade, decide if you're buying or selling, and input the number of shares. Choose "Limit" (LMT) as the order type. -
Order Configuration
Enter your target price. For sell orders, set it above the market price; for buy orders, set it below. Change the time-in-force setting from "DAY" to "GTC." -
Final Review
Double-check all order details before submitting. To increase chances of execution, consider enabling "fill outside regular trading hours." Also, be aware of any auto-cancel date warnings from your broker.
"While many active investors may only use Day orders, the GTC designation means that you can place orders and then forget about them for weeks, and even months at a time. When you use this order type, it will remain in force until it either fills or is otherwise cancelled."
GTC Order Management Tips
Once your GTC orders are set up, managing them regularly is crucial to keep your strategy aligned with market trends. Regular checks help prevent unexpected executions and ensure your approach stays on track.
Order Review Schedule
A consistent review schedule can help you stay in control of your GTC orders. For example, Fidelity automatically expires GTC orders after 180 calendar days, but this can vary depending on your broker. Here's a simple framework for reviews:
| Review Frequency | Focus Area | Suggested Actions |
|---|---|---|
| Weekly | Market prices | Compare your order prices to recent trading ranges. |
| Monthly | Investment goals | Check if your orders still align with your overall strategy. |
| Quarterly | Corporate actions | Look into upcoming events like splits, dividends, or mergers. |
In addition to scheduled reviews, setting up alerts can improve how quickly you respond to market changes.
Setting Price Alerts
Price alerts are a helpful tool to track market movements without constant monitoring. For example, on Robinhood, you can tap the bell icon on a stock chart, choose 'Add alert,' and set your desired price levels. To get the most out of alerts:
- Set alerts at several price points near your GTC order price.
- Include both upper and lower limits to track significant price changes.
- Configure alerts to notify you of notable volume shifts.
These alerts make it easier to adjust your orders as the market evolves.
Removing Old Orders
It's also important to clean up your GTC order book periodically. Remove orders when:
- Market conditions have changed drastically since placing the order.
- Your investment strategy has taken a new direction.
- Corporate actions like stock splits, dividends, or mergers are approaching.
- Your broker's automatic expiration date is coming up.
"Regular monitoring is a key best practice when using GTC orders... By frequently reviewing your GTC orders, you ensure that they align with your current investment strategy and market conditions. This can also prevent the unintentional execution of orders that are no longer desirable."
Trading Tools for GTC Orders
Take your GTC strategies to the next level by leveraging advanced trading tools. Many modern trading platforms offer features specifically designed for effective GTC order management.
LuxAlgo Trading Features Overview
LuxAlgo empowers traders with hundreds of free trading indicators, exclusive toolkits, and an AI Backtesting platform on TradingView to help refine your strategies. Their offerings include:
| Toolkit | Main Feature | Benefits for GTC Orders |
|---|---|---|
| Price Action Concepts | Detects patterns automatically | Pinpoints ideal entry and exit points |
| Signals & Overlays | Uses multiple signal algorithms | Assists in validating GTC order price levels |
| Oscillator Matrix | Tracks real-time divergences | Confirms trend strength for longer-term orders |
One standout feature is the AI Backtesting Assistant, which allows traders to test GTC strategies across various timeframes, helping fine-tune entry and exit points for better outcomes. Regularly reviewing your GTC orders ensures you can adapt to market shifts and economic events – crucial for managing risk effectively.
Platform Compatibility
For smooth GTC order execution, your trading tools must work seamlessly with your broker's platform. This ensures timely execution and better control over risks. LuxAlgo’s features, for instance, are available on TradingView, offering benefits such as:
- Real-time market data integration
- Custom price alerts tailored to your needs
- Saved chart layouts for personalized trading setups
Key platform features for managing GTC orders include:
| Feature | Purpose | How It Helps GTC Orders |
|---|---|---|
| Price Alerts | Sends notifications | Keeps track of order execution proximity |
| Risk Management | Sets stop-loss levels | Shields against unfavorable price moves |
| Order Modification | Enables quick changes | Adjusts strategies as markets fluctuate |
| Market Data | Provides real-time updates | Helps make informed decisions |
Lastly, check that your platform supports automatic tracking of order expiration to avoid missed opportunities or unintended risks.
Summary and Next Steps
Now that we've covered the benefits and strategies for managing GTC orders, here's how to simplify your execution process:
-
Set Up Your GTC Order Framework
Start by defining clear price targets based on your market analysis. Use technical indicators to confirm your entry and exit points. -
Establish a Regular Review Routine
Keep your GTC orders in sync with your goals by reviewing them consistently:- Check daily for price alerts.
- Adjust weekly to reflect market trends.
- Reevaluate monthly to ensure your strategy stays on track.
- Assess risk parameters every quarter.
-
Use Advanced Tools
Take advantage of advanced analysis features to fine-tune your strategies and improve order management.
Keep in mind that brokers often limit GTC orders to 30–90 days. Make sure your strategy accounts for these limitations. Use price alerts on your trading platform to stay updated on execution levels.
For a more disciplined approach, consider combining GTC orders with stop-loss orders. This strategy helps protect your positions while allowing you to seize opportunities, even when you're not actively monitoring the markets.
