Bracket Orders - Could Your Trading Method use them?

Discussion in 'Technical Analysis' started by easymon1, Sep 11, 2020.

  1. easymon1


    Bracket Orders - Could Your Trading Method use them?

    The Bracket order is a tool for traders to manage risk and reduce the pressure of monitoring a position on an hourly or even minute by minute basis.

    For example, Bracket Orders with a simple Double Top Trading Method for Stop, Entry and Exit Prices
    - Manage risk
    - Reduce position monitoring
    - Get more time to go look for more trades.

    trading double top8.jpg

    cued up...

    How To Trade Double Top and Double Bottom Patterns

    1. Bracket Orders have the advantage of “set and forget”.
    2. When your target is executed, your stop loss gets automatically cancelled. No manual intervention is required. Vice versa is true. In a normal order sometimes one may forget to cancel their Stop Loss and that might get executed as a separate order, without the individual’s attention, and will get squared off in evening at whatever price it gets.
    3. Able to fix the target and Stop Loss in a single order.
    4. Entry is possible through a limit order and this avoids slippage.
    5. Have trailing Stop Loss option which is good if the price moves in the favourable direction.
    6. All quantity will get executed since it is a market order during exit.
    7. Bracket Orders also protect one from any technical glitches of the brokerage.
    8. Bracket Orders make sure that profit or loss lies between two limits of an acceptable profit and bearable loss that you set.
    9. A loss is covered as there is a compulsory stop loss.
    10. The best feature about Bracket Order is that a trader can put the orders and be rest assured that either the Target Order gets executed and gives him profit or the stop loss gets executed and the trade would be executed at a loss. There is no need to monitor the screen for booking a loss or profit.

    • Limit orders are not possible during exit.
    • Executed exit price will be market price and can slightly move up or down and form a slippage from your assumption.
    • Entry through Stop Loss trigger is not allowed so one has to submit the bracket
    • Order cancellation is not possible, one needs to close their position once they have entered.
    • Need to be logged in while target order executes as compared to a cover order.
    • Becomes a little tough to modify a bracket order after it’s placed.
    But considering how the markets go so volatile, brackets still seem like the most sensible strategy to protect your investments and still make some money.

    What is a Bracket Order?
    Last edited: Sep 11, 2020
  2. pixel


    Interesting read. Thank you for sharing
  3. danielc1


    Your cons, depends on the software. I use bracket orders and I put limit target orders in it. I even can set a entry stop (limit) for an entry with a bracket attach to it. I can at anytime, while in position, cancel bracket orders 'pending' in total, or per order in the bracket. Resetting the order in of the brackets when in position is easy done, trough just moving the orders in dom or chart.
  4. Bugsy


    I use OSO bracket orders every trade. My stop and limit exit is set before. I enter via limits and adjust my entry/exit several times with ease if the price fluctuates from the original price. If you have a good brokerage platform then many of the cons you stated don't exist.
  5. KCalhoun

    KCalhoun Sponsor

    Similarly, I use OTO conditional orders, one triggers other, smart because it sets your stop automatically.
  6. patrickrooney

    patrickrooney Sponsor

    TT added Bracket Orders a few years ago. They're very popular.

    KCalhoun likes this.
  7. rcsmie


    I use IB bracket orders, and for Ninjatarder MES, I have stoploss and profit orders set automatically. I guess they consider as bracket orders as well.

    I don't think you could go without it if you are aiming for anything above semi-pro
    KCalhoun likes this.