Bracket order

1. Take your Crypto Trading to the Next Level by Using Bracket Orders If you are an expert trader whose trading strategies have gone towards the more sophisticated side of things, then it’s time that your trade entries and exits require an extra nuance. Isn’t it? In most of the cases, the basic order types may cover all your trade execution needs. But if you really want to fine-tune your trades, a host of advanced order types are available. The advanced order types fall into two categories i.e. conditional orders and durational orders. Conditional orders mean your order will be fulfilled under specific conditions. On the other side, durational means that the order will take place within a specific timeframe. Anyone can place trades if he has some knowledge about trading, but managing these trades is a difficult task. This is where bracket orders can help you out. Bracket order Bracket orders are conditional orders which are useful in intraday trading. It involves three combined orders in one order. As the name suggests, bracket, these orders are

2. used to bracket the trade. This suggests that in addition to the initial order, two different direction orders are also included in this order. This approach is actually suggested for both buy and sell orders. Bracket order categories Initial Order This is a kind of limit order which is used to establish the initial position Take Profit or target order This is the order that a trader wants to take advantage of, and take his position and profits. Stop-Loss Order This is the order used when the market is undesirable and you want to protect the losses. Let’s understand this with an example: If the original order is a buy order, then both target and stop-loss orders would be the sell orders. And, if the initial order is a sell order, then the second and third orders will be the buy order. How bracket order works? As discussed above, bracket order involves three different kinds of conditional orders including target exit, stop-loss exit, and trailing stop exit. A buy or sell order is immediately submitted to exit the trade if the criteria is fulfilled according to predefined instructions. So, if you have placed an order to buy an asset at $100. Along with that, you will have to place two more orders. One of them will be a profit order, which say, that if the asset price goes up to certain level, i.e. $130, your profit will be booked and the order will be triggered automatically. On the other side, the third order which you will place is the stop-loss order. In case, the trade is not working out and you want to limit your losses, placing a stop-loss order at $95 will be beneficial. So, all these three orders namely, your buy order, target order for taking profit, and trailing stop loss order put together in one bundle are called bracket orders.

3. The most interesting feature of this order type is that between target order and stop- loss, if any one of them gets triggered, the other one will be canceled automatically. Bracket orders are also termed as “OCO” (One Cancels the Other) orders. And, this order type is very beneficial for busy traders. Let’s consider one more example: Say you purchase ETHUSD at $1,200. You can immediately set a potential profit target of $1,300 and a stop loss at $1,100. The crypto trading bot then automatically creates a limit sell order of $100 above the entry price and $20 below. The trader would go long ETHUSD for $1,200. If moves to $1,300, the limit sell order would activate to render a $100 profit per coin. It would also cancel the stop loss $20 lower at $1,180. That way, you don’t have any extra unfilled orders. It works the same to the downside. A drop to $1,180 would trigger the stop loss and cancel the $1,300 sell order. Advantages of bracket orders By bracketing a request with stop loss, trailing stop, and the target profit, you can secure your earnings and protect yourself from losses. If one of the conditions is met, a request to quitting the position will be sent automatically. Let’s understand some other benefits of bracket orders: 1. Reduces the risks to unbearable losses with the predefined stop-loss orders 2. Allows traders to set the target and stop-loss manually in one single order 3. Trailing stop loss option is available to increase your gains whenever the price moves in a favorable direction

4. 4. These orders are automatic and give protection to the traders 5. Bracket orders provide automatic risk management 6. It offers maximum possible options available in any order type Disadvantages of the bracket orders 1. These orders do not allow you to put a limit order during exit. 2. Since entry via stop loss order trigger is not permitted, you have to put the bracket order at the same point where the stock is trading 3. You can’t modify the order once you have entered any trade, you have to close your spot to exit These orders seemed to be quite complicated to understand. But these orders are very simple and most of the traders use this order to minimize the risks. These orders are a big help for clients as they do everything at once: entry, profit target, and stop loss. Clients don’t have to watch the positions regularly or keep checking prices. They also function as a unified set of instructions that will trigger or cancel each other whenever the predefined conditions are met. For more information visit https://www.trailingcrypto.com/