A Simple bracket is the most basic type of OCO (Order Cancels Order) automated trade type. A simple bracket is easy to set up using the InfinityAT™ DOM. There are two “legs” to a simple bracket which are applied around your position once you are filled (I.e., initiate a position).
The first leg of the trade is your profit target and the second leg is your stop loss. On the InfinityAT™ DOM, you can preset the level (in ticks) where you would like the profit target and stop to be placed once you are filled. These presets can be applied prior to the trade entry or after. If you would like to send a bracket manually after your filled them simply uncheck the Auto box.
Setting up your Simple Bracket OCO
Once preset then you would place a trade either a limit order or a market order and by the way this would work on a stop order if you were going to enter a position on a stop. Once your order is filled the bracket order will automatically be placed by the trading platform. You will instantaneously see your profit target and stop loss on the trading ladder.
Simple Bracket with a Profit Target set at 8 ticks and a Stop Loss set at 5 ticks
- Long Position at 3019.25 (blue)
- Profit Target at 3021.25 (green)
- Stop Loss at 3018.25 (red)
When one leg of this bracket order gets filled the other leg will automatically cancel resulting in zero position with no outstanding orders remaining on the DOM. In other words, if you are fortunate enough to achieve your profit target then your stop loss is automatically cancelled. Alternatively, if the market went against you and you were stopped out of your position then your profit target would automatically be cancelled. At the end of the trade you would be flat (no position) and have executed either a winning or losing futures trade.
Although automated, a trader can still cancel and replace either of the legs of the bracket order without deactivating the OCO automation. In the example above you can move your target or stop loss to a higher or lower price by clicking on the open order, moving your mouse to another price and clicking again.
InfinityAT™ DOM Provides further convenience by allowing you to simply right click on either the profit target or the stop loss to cancel both legs of the order. Keep in mind if you do this you will still have an open position.
Why would a trader want to use a simple bracket instead of simply single clicking on the trading DOM? Although single clicking is quick easy and efficient it may not be as fast as a preset simple bracket. Predefining your profit target and stop loss is considered best practices for overall trade management.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. Past Performance is not indicative of future results.