A bracket order is an order type where a trader can execute a new trade which consists of a target price, as well as a stop loss. It involves the execution of two more orders, namely the stop-loss order and profit-taking order when the trader executes the main order.
If the profit-taking order is executed, then the stop loss will be automatically canceled. The same also applies when the stop loss is triggered, then the profit-taking order is canceled. Bracket orders are also known as custom order-send-order(custom OSO) as per the above explanation.
Executing a bracket order through custom OSO on crypto exchanges through Growlonix
Growlonix does not have a direct option for a bracket order in the menu for selecting the order type. However, you can still use the available options to customize your order into a bracket order. To do that you would have to combine a stop buy with an order-cancel-order (OCO). Fortunately, the stop buy and OCO are available options on the order type menu.
Placing the stop buy and the OCO is quite simple. All you need to do is determine the price point where you want to place the stop buy on a specific cryptocurrency pair chart on the right side of the Growlonix platform. You will thus need to click on STOP BUY on the order type menu to input your preferred value. Once you are done, you can then click on the OCO order type and input your preferred OCO price point.
Why is it called a bracket order?
When setting up your bracket order On Growlonix you select the custom OSO and then place the STOP BUY as primary order while the OCO is used as the secondary order. What this essentially means is that you aim to limit your profits or losses within a specific price range. This is done to reduce the level of risk that the trader would otherwise be exposed to. If it’s a profit, the trader aims to take profit within this zone to avoid risking reversals.
On the other hand, the bracket also covers the stop loss in the predetermined price zone, therefore helping the trader to minimize losses. This focus on a specific price zone kind of executes in a manner that looks like the price range is bracketed off.
This approach makes a lot of sense because it allows you to completely do away with the previous set up. If the price triggers the primary order, then the secondary order is also closed. The same applies if the price triggers the secondary order where the primary order will then be closed. The bracket order approach is ideal for the cryptocurrency market.
Also, note that you can do this for multiple cryptocurrency exchanges. Growlonix allows traders to access multiple exchanges without leaving the Growlonix platform. You have to pick your preferred exchange before you commence the rest of your setup.