Bracket Orders

A bracket order is an entry order with two exit orders attached: a stop loss below and a profit target above for a long trade (the reverse for a short). When the entry fills, both exits become active. When either exit fills, the other is cancelled automatically. A bracket lets you define the entire trade, including the worst case, before you click buy.

The three parts#

The two exits are linked as a one cancels other (OCO) pair, so you can never end up with both filled. See OCO Orders. The link between the entry and the exits is a one triggers other relationship. See OTO and OTOCO Orders.

A worked bracket order#

Why bracket orders help#

• They enforce your plan. Stop and target are set when you are calm, not decided in the moment.
• They protect you when you are away. The position is managed even if you are not watching.
• They remove a classic mistake: entering without a stop "just for a moment".
• They make your risk exact. You know the loss if the stop fills before you enter. See Position Sizing.

Adjusting a bracket after entry#

Most platforms let you modify the stop and target after entry. Common adjustments:

• Move the stop to breakeven once the trade reaches a set profit, such as 1R. See Moving Your Stop: Breakeven and Trailing Stops.
• Convert the stop to a trailing stop to follow a strong move. See Trailing Stop Orders.
• Split the target into two, taking partial profit early and leaving the rest to run. See Scaling Out and Partial Profits.

Follow the same rule as always: move stops only in the direction that reduces risk.

Things to check on your platform#

• Time in force: make sure the stop and target are GTC if you plan to hold overnight. Day only exits disappear at the close and leave you unprotected. See Time in Force: Day, GTC and GTD Orders.
• Partial fills: if your entry fills partially, check that the exits adjust to the filled size.
• Server side vs local: some platforms hold bracket logic on the broker's servers; others only on your computer, which stops working if your computer or connection goes down.
• Extended hours: stops may not trigger outside regular hours.

Frequently asked questions#

What is a bracket order?#

An entry order with an attached stop loss and profit target, where the two exits cancel each other when one fills.

Can I use bracket orders for short trades?#

Yes. For a short, the stop sits above the entry and the target below it.

Do all brokers offer bracket orders?#

Many active trading platforms do, sometimes under names like "attached orders" or "OTOCO". Some basic apps do not.

Sources#

• Wikipedia, Order (exchange)