What Is a Bracket Order?

A Bracket Order (BO) is a type of advanced order that helps you manage both profit and loss within a single trade. It consists of three linked components:

• Primary Order: The initial market or limit order to enter the position.
• Target Order: An exit order to book profit when the price hits your desired level.
• Stop-Loss Order: A protective order to limit downside if the trade goes against you.

These three orders form a bracket around your trade—automatically managing risk and potential reward without further intervention.

 Why Use a Bracket Order?

A Bracket Order helps traders improve execution and reduce emotional decision-making. Key benefits include:

1. Automated Exit Strategy – Predefine your profit target and stop-loss before entering the trade.
2. Reduced Emotional Bias – Since exits are rule-based, you’re less likely to panic or act impulsively.
3. Better Discipline – BOs enforce structured risk management, which is key to long-term trading success.

Use Cases for Bracket Orders

How to Place a Bracket Order on the RMoney Rocket App?

Follow these step-by-step instructions:-

1. Open the RMoney Rocket App and select your preferred segment — Equity or F&O.
2. Search for the desired stock or instrument (e.g., Canara Bank, Nifty Futures).
3. From the Product Type menu, choose “Bracket Order (BO)”.
4. Enter the primary order details:
   • Choose Order Type: Market or Limit.
   • If you select Limit, specify the entry price.
   • Enter the Quantity you wish to trade.
5. Set the Target (Profit Booking Level):
   • Enter your profit target under the Square Off
   • This value must be in absolute points, not price level.
   • For example, if Canara Bank is trading at ₹111.6 and you want to book profit at ₹115.6, enter 4.
6. Set the Stop-Loss:
   • In the SL (Stop Loss) field, input the points by which you’d exit if the trade goes against you.
   • Example: For a stop-loss at ₹109.6 on Canara Bank trading at ₹111.6, enter 2.
   • You may also enable Trailing Stop-Loss (TSL) by checking the box and specifying the trailing value.
7. Place the Order:
   • Once the primary order is executed, the system automatically places both the target and stop-loss

If one of the exit orders executes, the other is canceled automatically (OCO – One Cancels Other logic)

 Best Practices for Using BOs

1. Set Realistic Targets – Base your profit and stop-loss on technical indicators or price behavior.
2. Position Sizing – Calculate trade size based on your capital and acceptable risk. Traders often use risk-reward ratios like 1:2 or 1.5:2 or vice versa depending on their strategy.
3. Adjust for Volatility – Experienced traders adjust their SL and targets in volatile market conditions to maintain their risk.
4. Margin Awareness – Ensure sufficient margin since both target and stop-loss orders remain active until one executes.

Conclusion

1. You enter a trade with a pre-set profit target and stop-loss.
2. The system automatically activates both exit orders.
3. Once one leg is triggered, the other is automatically canceled, securing either your gain or limiting your loss.

Need Help?

Reach out to the RMoney support team for assistance: Phone: 0562-4266600 / 0562-7188900, Email: askus@rmoneyindia.com

Disclaimer- This content is for educational purposes only and does not constitute investment advice. All investments are subject to market risk. Please consult a certified advisor before making trading or investment decisions.