What Is GTD Order in Trading and How to Use It?

If you are involved in trading, you will need to deal with time management a lot. It is not only about the time needed to execute a specific order but also about risk management and timeframes that refer to your specific trading tactics. GTD order is a type of trade order that is valid within a predefined period except for occasions it has been canceled or successfully executed.

The abbreviation of the GTD order stands for “good till date”. It may also apply to a specific time or day. If you trade in the currency exchange market, the majority of your orders are of GTD type by default. Traders are supposed to fulfill them till the trading day is closed. Otherwise, they will be automatically dismissed.

At the same time, it may turn out to be an operational tool. They make it possible to cover longer periods when after not being executed as a result of market poor liquidity. In other words, a GTD order may be a good tool in the hands of long-term investors eager to trade a wider range of securities at a fixed price rate.

Tips to Understand a GTD Order

First of all, it is a great tool not only for long-term investors but also for beginners opting for long trades. It will help them keep the same order with a chosen day and time validity instead of creating and setting up new orders day by day. In other words, traders get a chance to avoid daily routines, which can be quite time-consuming.

Secondly, a GTD order refers to a condition-based type. It means that order execution will take place only when certain parameters and factors are met. As a rule, those parameters are mainly price-related. A GDT order may expire only by date and time specified by traders. So, you are the one to set those conditions.

Using the GTD Order in the Stock Market

While the trader defines conditions and parameters that identify the GTD order expiration conditions, it will remain active in the system. For this reason, traders should take into account some of the following features:

1. If unfilled, the order will be canceled at the end of the day, date, or time, specified by the trader. So, you need to consider it when setting GTD up.
2. 2.      Traders will take advantage of expanded flexibility, as they will be able to use shorter or longer time frames for the trade. Those periods will identify the end of the order execution or cancelation.
3. Investors may configure the GTD order at a fixed price and trading volume.
4. Traders do not have to log in and set new orders all the time each and every day.
5. Commissions from each order are charged separately, even if they are executed partially.

The only drawback here is that some traders tend to forget about all GTD orders they have in the process. It might be a crucial mistake when considering markets moving rapidly all the time. To avoid unexpected losses, keep them all in one place.

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.