There is a saying that “Time and tide wait for none”. Time is extremely precious, even in trading. An intraday trader must keep trade execution time and cost of trading at a minimum when adopting the scalping strategy. Many of the traders deal with a problem of not placing orders in a quick fashion. Like first they place an entry order and then placing a stop loss and then placing a profit booking order. In this case, a trader has to place 4 different orders, which is a tedious task and for a scalper its a waste of time. So this issue was solved with a bracket order, a bracket order allows us to place stop loss and profit taking orders under 1 single order.
A bracket order will let the trader enter entry price, stop loss, trailing stop loss and also profit booking order.
This bracket order has 4 different types of orders in it:
- Entry limit level
- Stop loss
- Target (Profit booking)
- Trailing points (Ticks)
Let us see each of these in detail:
- Entry limit level: This is the level at which trade will be executed. This is lower for a buy order and higher for sell order type.
- Stop loss: The level at which your losses will be booked. It also defines the level at which you will exit this trade if it goes against your trading idea. When stop loss is hit, profit booking order is automatically canceled.
- Target (Profit booking): When the target price is reached the profit is booked and stop-loss order is canceled immediately.
- Trailing points (Ticks): When you select the stop loss as a trailing stop loss. Then stop loss will keep moving in your trade direction. Like if you bought nifty future at 11000 and place a stop loss at 10900 and target at 11200. Then with every point, nifty moves in your favor the trailing stop loss will also move higher. It helps when you want to take maximum advantage of the current trend.
Bracket orders will save you lot of time if you are an active intraday trader, as it allows us to place stop loss and profit taking orders under 1 single order. If you are unable to place bracket order, then its because your broker doesn’t allow this service. You can open a trading/ demat account using this link: https://upstox.com/open-account/?f=ZOJQ and our team will get in touch for the account opening process. Also, call us on +91-9970777789 for brokerage cash back offers.
Since my risk and reward are already defined in bracket order, it allows me to take highly leveraged positions in nifty, banknifty or any other stocks. Now learn intraday trading strategies with our Technical Analysis Course Online.