A Good Till Cancelled (GTC) order is a type of trading order that remains active until it is either executed or manually cancelled by the trader. Unlike day orders, which expire at the end of the trading day, GTC orders persist indefinitely, allowing traders to maintain their trading strategies over a longer time frame.

Understanding GTC Orders

A GTC order gives traders flexibility and convenience, especially for long-term strategies. It is commonly used when traders want to buy or sell a security or currency at a specific price level and are willing to wait for market conditions to meet their criteria.

For example, if you want to buy EUR/USD at 1.1000 but the current price is 1.1050, you can place a GTC order at 1.1000. The order will remain open until the price reaches 1.1000 or you decide to cancel it.

How a GTC Order Works

1. Placement: The trader sets the GTC order with specific parameters, such as price level and trade size.
2. Duration: The order stays active indefinitely, regardless of trading sessions or days, unless the broker has specific expiry rules.
3. Execution: The order is filled only when the market price matches the specified price or better.
4. Cancellation: The trader can cancel the order manually at any time if the desired price is no longer relevant.

Advantages of GTC Orders

• Convenience: Eliminates the need to monitor the market constantly.
• Flexibility: Useful for long-term strategies that require precise price levels.
• Market Opportunity: Ensures the order is ready to execute whenever the market conditions meet your criteria.

Disadvantages of GTC Orders

• Overlooked Orders: If not monitored, a GTC order might execute when the market reaches the price, potentially catching the trader off-guard.
• Market Changes: Market conditions or strategies might change, rendering the order irrelevant or undesirable.
• Broker Policies: Some brokers may limit the maximum duration of GTC orders to a specific time frame, such as 30 or 90 days.

When to Use a GTC Order

• Long-Term Price Targets: Use GTC orders for trades where you are targeting specific price levels over an extended period.
• Illiquid Markets: Ideal for markets where price movement is slow, and reaching your desired level may take time.
• Stop-Loss and Take-Profit Strategies: Combine GTC orders with stop-loss or take-profit levels for automated risk management.

How to Place a GTC Order

Step 1: Choose the Order Type

Select the Good Till Cancelled option in your trading platform’s order type menu.

Step 2: Define the Order Parameters

• Price Level: Specify the exact price at which you want the order to be executed.
• Lot Size: Set the trade size.

Step 3: Submit the Order

Review the details and confirm the order. The order will remain active until it is executed or manually cancelled.

Step 4: Monitor the Order

Although the order persists indefinitely, periodically review it to ensure it still aligns with your strategy.

Example of a GTC Order

Suppose the current price of GBP/USD is 1.2500, and you want to buy at 1.2400. You place a GTC order at 1.2400. If the price drops to 1.2400, the order will execute automatically. If the price never reaches 1.2400, the order will remain active until you cancel it.

FAQs

How long does a GTC order last?
A GTC order remains active indefinitely unless executed or manually cancelled. Some brokers may impose time limits, such as 30 or 90 days.

Can I cancel a GTC order at any time?
Yes, you can cancel a GTC order manually before it is executed.

Is a GTC order guaranteed to execute?
No, it will only execute if the market price matches or exceeds the specified level.

What is the difference between a GTC order and a day order?
A day order expires at the end of the trading day, while a GTC order remains active until cancelled.

Do GTC orders work in after-hours trading?
This depends on your broker and the market. In forex, GTC orders are active around the clock due to 24-hour trading.

Can I modify a GTC order?
Yes, most platforms allow you to adjust the price level or trade size of a GTC order.

What happens if a GTC order is partially filled?
The unfilled portion remains active until it is executed or cancelled.

Is a GTC order suitable for forex trading?
Yes, GTC orders are commonly used in forex to target specific price levels over time.

Do all brokers offer GTC orders?
Most brokers support GTC orders, but it’s best to confirm with your broker.

Can GTC orders incur additional fees?
GTC orders typically do not have extra fees, but standard trading costs, such as spreads or commissions, still apply.

Conclusion

A Good Till Cancelled (GTC) order is a versatile tool for traders who want to target specific price levels without constant market monitoring. While it provides flexibility and convenience, it’s important to review your GTC orders regularly to ensure they align with your trading strategy and market conditions. By understanding how to use GTC orders effectively, you can enhance your trading efficiency and precision.