In this article we explain what a day order is and give you some examples. We will also tell you what the advantages and disadvantages of a day order are.
A day order is an order that is only valid for one trading day and is placed with a limit or a stop. If the specified price level is not reached, the order expires at the end of the trading day. This type of order is therefore mainly used by day traders. A day order gives the broker the order to open the corresponding position, provided the specified price is reached within one trading day. However, if the limit is not reached, the order with the broker expires.
There are two types of daily order:
If the fixed price at which the order is to be executed is less favourable than the current price with exness withdrawal time, it is a stop day order. It is basically the same as a stop order, except that it is only valid for one trading day. So the trader sets a certain price that is worse for him than the current price. The broker executes this trade if the stop limit is reached within one trading day. If the stop is not reached on the respective trading day, the order is cancelled.
At first glance, it seems illogical to want to execute a trade at a worse price than the current market value. However, this order can be used to limit losses or to enter the market as soon as a certain trend has been confirmed. The stop-day order thus protects against possible losses within one trading day.
If the fixed price at which the order is to be executed is more favourable than the current price, it is a limit day order. It is basically the same as a limit order, except that it is only valid for one trading day.
The limit order is therefore the opposite of a stop order. The trader sets a certain price that is better for him than the current price. The broker executes this trade if the limit is reached within one trading day. If the limit is not reached on the respective trading day, the order is cancelled.
Since you are hoping for an advantageous price reduction, i.e. a short-term price setback, you place the limit day order at a price of 12.40 €. If the price falls to €12.40, the order is executed, otherwise the order is cancelled at the end of the trading day.
