Manage Your Risks with Bracket Orders as Your Next Trading Strategy

by Trailing Crypto cryptocurrency experts

Placing orders in crypto trading is the foremost thing to do before initiating any trade. Crypto trading has become the hottest trend, and every investor wants to invest their money here to earn profits. But, you know, managing those trades is quite a daunting task and it requires some special skills along with profound knowledge about trading.

If you are the one looking for a setting with a defined profit and stop-loss point, then considering bracket orders from the best crypto trading platform like TrailingCrypto is the best option. These orders are specially used to limit the loss and lock in profits by bracketing an order with two opposite orders. Bracket orders are also termed as OTOCO (One Trigger a One Cancel Order) or OCO order (One Cancels Other). These orders help its traders to minimize the loss value. How?

So, you are also wondering, what bracket order is, and what’s the benefit of using it? Let’s explore it:

Bracket Order

This is a handy advanced tool used in the crypto trading market which increases the traders’ chances of maximizing profits while decreasing the chances of loss. Bracket orders are used as a risk protection tool available for intraday trading to perform three orders simultaneously. For example, a trader will place one buy order with two sell orders.

Crypto traders are always looking for efficient and profitable ways to place multiple trades on the go. They want to do so without facing any kind of unnecessary risks or missed opportunities. Usually, they make use of limit orders to avoid risks, but for those who are looking for additional security checks and those who want to increase their chances of earning good profits, bracket orders work amazingly. 

Bracket orders are conditional orders. In this order type, the trader enters a new position along with a target and stop-loss order. As soon as the main order is executed, two more orders, i.e. stop-loss and take profit will be placed. Whenever any one of these orders is executed, the other one gets canceled automatically. Traders can even use these orders for futures trading on multiple exchanges. TrailingCrypto allows its traders to use OCO and OSO orders easily, and can customize them.

How does a bracket order work?

Well,a bracket order consists of three conditional orders, including the original buy and sell order, stop-loss value, and profit taking target. Instead of using a normal stop-loss, the traders can consider using trailing stop-loss here, which moves the stop-loss price up and down depending on the current price movements.

One drawback of using a trailing stop loss order here is that you can’t edit the order. Let’s understand about this order with an example:

For example, if you are buying any crypto asset, say, XYZ at $100. To place a bracket order here, you now have to place two more orders. Now, if you are setting the target to sell at $130, you must place a limit sell order at that price. If the price of the asset moves up, the order will get triggered immediately. 

On the other side, the third order you will be placing is for stop loss. Here, if the market is not performing as per your predefined conditions, you can go for stop loss at $95. 

If the price of XYZ meets $95 or $130, any other order placed will get cancelled immediately. Last but not the least; you can also go for trailing profits. All in all, choosing bracket orders for your trade could be a great option if you are trying to stay within a defined or the target price range.

Now, we have understood how bracket orders works, and it’s completely possible to set this logic up algorithmically via making use of API from TrailingCrypto. However, the full functionality enabled within the best crypto trading platforms allows for better risk management. This also helps minimizing the potentially costly mistakes.

When to use bracket order?

Well, using a bracket order is an ideal option for those who want to earn profits while limiting their risk, even if they are not present at their system.  Bracket orders can be set before any trade gets executed. This order type ensures flexibility, and control over the trader’s profit and loss.

Bracket order can be placed by traders while placing a market or limit order. And, after setting a bracket order, making any changes or modifications to the trade/order is not possible.

Traders can consider using Bracket orders in two ways including:

·         Buy Bracket order- This order is usually bracketed by a high-side sell order as take profit and then, a low-side sell order i.e. stop loss order. You can use this order for long trades.

·         Sell Bracket order- On the other side, this bracket order will be bracketed by a low-side buy order,which is used as a take profit order and a high-side buy order, which is used as stop-loss order. Traders usually use this order for short trades.

Making use of bracket orders works well in volatile market trends. And, when it comes to setting a bracket order via the best trading platform, TrailingCrypto, you may easily select the custom OSO order and then place stop buy as your primary order. Here, you may consider usingOCO order as the secondary order. The expert crypto traders use these orders smartly and earn huge profits/benefits by using crypto trading signals from the telegram groups run by this platform.

OCO/OSO order via TrailingCrypto

OCO stands for One-Cancels-the-Other order. This order allows traders to place two orders at the same time where one order will be cancelled automatically whenever the other order is executed. Usually, this order is used as an effective tool to secure gains in the market. 

OCO order is used to manage risk in an open trade. This is a group of two conditional orders i.e. stop order and limit order. OCO orders can be used in three scenarios, i.e. managing risk in open positions, trading when breakouts occur, and when it comes to deciding between buying any two cryptocurrencies.

Placing OCO on TrailingCrypto

• Select OCO order type from the drop-down menu
• Select Base and Quote coin. For example, Market: BTC/LTC
• Select the number of coins that need to be sold. E.g. 10 coins
• Fill the Stop Loss fields.
• Fill the Take Profit fields.

On the other side, OSO order stands for Order-Sends-Order. This is also a kind of conditional order in which the execution of the primary order triggers the placement of one or more secondary orders. Traders can use this order to generate entry and exit points with one order. Generally, experienced trades use this order to mitigate risks while locking in the profits. This order is opposite of OCO order where the execution of a primary order cancels one or more other orders.

Placing OSO on TrailingCrypto

Steps to place an OSO order:

1. Select the type of OSO from dropdown. You can use this combination as Trailing Stop Buy + Trailing Stop Sell.
2. Select Market Pair: Example BTC/ADA
3. Offset1: The first offset is to specify Trailing Offset for Sell Order. Example 10%
4. Offset2:  The second offset is to specify Trailing Offset for Buy Order. Example 8%
5. Amount of Base coin to trade. Example 0.5 BTC

Repeat

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Created on Oct 5th 2023 10:58. Viewed 91 times.

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