According to Wikipedia,
Delayed gratification, or deferred gratification, is the ability to resist the temptation for an immediate reward and wait for a later reward. Generally, delayed gratification is associated with resisting a smaller but more immediate reward in order to receive a larger or more enduring reward later.
The opposite of delayed gratification is instant gratification.
Read this interesting marshmallow article on delayed gratification: 40 Years of Stanford Research Found That People With This One Quality Are More Likely To Succeed
We can apply the concepts of delayed gratification to the stock market. Many times, I find myself rushing in to buy a stock, with the thought of profits ringing in my mind. As such, I end up making stupid mistakes such as buying on a high price, usually because I'm afraid I might miss the boat.
Long dated orders can help you to stay objective in the stock market. Long dated orders, as the name says it, stays in your order book until it gets transacted or expires.
For example, you find that OCBC will make a good addition in your portfolio, but you don't want to buy it now at $8.45, which you consider the price to be on the high side. You decided that you will only buy at the furthest of 20 bids cheaper, at $8.25. Placing a "Good Till Date" order will let you specify that you wish to queue to buy OCBC at $8.25 up till end of August.
Humans have a tendency to rush into buying a stock without giving much thought of how much further the dollar can be stretched. Besides Gain City and Big Box, the stock market can also be a place for bargain hunting. If you've been looking for a branded TV going at $2,499 and the sales guy told you it may go for $1,999 next week, wouldn't you consider waiting?
Buying stocks with a Good Till Date (GTD) or Good Till Maximum (GTM) instruction is similar to buying the branded TV at a cheaper price on a later date, just that you do not know for sure whether OCBC will drop till $8.25 but for sure you know you will buy OCBC if it drops to $8.25 (and hits your queue). If you can buy at $8.25 instead of $8.45, why not worth the wait?
To know how to place long dated Orders on Lim Tan Platform, please visit my earlier post on A Good Habit: Placing Long Dated Orders.
To place long dated Orders on Lim Tan Andriod or iPhone Apps, select "Time-in-Force" when placing orders.
You may want to read:
