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What is bracket order?


johnykmanus

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A Bracket Order is a special type of order through which the stoner can take anintra-day position and take advantage of redundant exposure while being defended through a stop loss order and a profit ideal( profit booking) order.

The system will place three orders contemporaneously a limit order( 1st leg), a corresponding stop loss request order which would only get touched off at the specified stop loss detector price( 2nd leg), and a matching profit ideal limit order which only get touched off at the specified profit objective price( 3rd leg).

still, the stop loss order gets executed as a request order and the 3rd leg( the profit objective order) automatically gets cancelled, If the stop loss detector price is hit. also, if the profit objective detector price gets hit, the stop loss automatically gets cancelled.

The combination of all three of these orders being placed contemporaneously is known as a Bracket order. type Orders help you limit any implicit losses that could be incurred on a position while also allowing you book gains at your specified target

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A bracket order is a type of order commonly used in trading that consists of multiple parts or components. It is designed to help traders manage their risk and protect their positions by automatically placing orders to limit potential losses and lock in profits. A bracket order typically includes three main components:

Entry Order: The entry order is the initial order to enter a trade. It is usually a market order or a limit order to buy or sell a security at a specified price. Once the entry order is executed, the trade is triggered and the position is established.

Stop Loss Order: The stop loss order is a protective order that is placed alongside the entry order. It is designed to limit potential losses by automatically selling a security if its price reaches a predetermined level. The stop loss order helps traders control risk by exiting the position if the price moves against their expectations.

Take Profit Order: The take profit order, also known as a profit target order, is another component of a bracket order. It is an order to sell a security once its price reaches a specified target level. The take profit order allows traders to lock in profits by automatically closing the position when the desired profit target is reached.

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