Master Your Trades: A Guide to Order Types and Risk Management
Understanding the validity or duration of your orders is just as critical as choosing the right price . . These instructions act as a direct communication line to your broker’s system, dictating exactly how long an order should remain active before it is cancelled . Whether you are a beginner or looking to trade like a pro, mastering these tools gives you full control over the "when" and "how much" of every transaction . 1. Timing is Everything: Order Validity Order validity determines the lifespan of your trade. Choosing the wrong setting could lead to unexpected fills or missed opportunities. Order Type How it Works Best For DAY Automatically deleted if not filled by the market close (e.g., 4:00 PM) . Intraday traders avoiding "overnight surprises" . GTC (Good Till Cancelled) Remains "on the books" until filled or manually cancelled (usually up to 30–90 days) . Long-term investors waiting for a specific "dream price" . GTD (Good Ti...