Future trading using bracket orders
- Thread starter desiwarrenbuffet
- Start date
- Tags bracket order futues
I am trading using Bracket orders, to mention, I make use of it successfully. My profits increased ever since I started using Bracket orders.
Few points to remember:
1. Bracket orders in huge quantities: When you use bracket orders for large quantities, it gets executed in multiple orders. For every executed order, it places separate orders for stop loss and targets. This increases brokerage charge in our contract sheets.
2. Bracket orders more often hits stop losses than targets. I am not saying this because of my trading strategy. I consulted with other friends of mine who use bracket orders and I got this observation that bracket orders more often hits stop losses than targets.
Until I got observed this, I was making only losses. After I observed this, I started developing my order re-entry skills and in another end I made sure my rewards are so high.
Ex: in NiftyBank I was having 1:1 risk:reward ratio. and My order hits stoploss and I got nervous and stopped for that day. But after I observed above thing, I started three times re-entry for a day and had 1: 4 risk:reward ratio. Means for 20 pts SL, I had 80 pts Target, for this I started using higher time frame.
Few points to remember:
1. Bracket orders in huge quantities: When you use bracket orders for large quantities, it gets executed in multiple orders. For every executed order, it places separate orders for stop loss and targets. This increases brokerage charge in our contract sheets.
2. Bracket orders more often hits stop losses than targets. I am not saying this because of my trading strategy. I consulted with other friends of mine who use bracket orders and I got this observation that bracket orders more often hits stop losses than targets.
Until I got observed this, I was making only losses. After I observed this, I started developing my order re-entry skills and in another end I made sure my rewards are so high.
Ex: in NiftyBank I was having 1:1 risk:reward ratio. and My order hits stoploss and I got nervous and stopped for that day. But after I observed above thing, I started three times re-entry for a day and had 1: 4 risk:reward ratio. Means for 20 pts SL, I had 80 pts Target, for this I started using higher time frame.
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Though the BO allowed to be used in Stock futures, I strongly felt that I shouldn't trade stock futures in BO as I got beaten heavily and as trial and error method, I continued and making more losses.
Finally, I stopped stock futures and started using BO only for Nifty50 and NiftyBank. It paid me well.
Reason for stock futures trading be more painful is, the bad risk reward ratio. By a 1 pt stop loss in sbi, we can loss ten times as much we loss in normal order.
Finally, I stopped stock futures and started using BO only for Nifty50 and NiftyBank. It paid me well.
Reason for stock futures trading be more painful is, the bad risk reward ratio. By a 1 pt stop loss in sbi, we can loss ten times as much we loss in normal order.
It is usual two times I get my stop losses get hit and third time gets the profit. As I am targeting 1:3 or 1:4 risk-reward ratio, I stand in good profits in overall. Ex: First trade gets hit 20 pts stop loss, 2nd one 20 pts SL hit, in third trade I get 60-80 pts profits.
But in a very good day, I get the 60 - 80 pts profits in my first or 2nd trade itself and if it happens I stop for that day and enjoying profits.
These three trades can be on the same side or reversal, it depends upon the underlying movement. Example: I place first order LONG, sl hit, Second order reversing SHORT, sl hit, third order LONG/SHORT gets the profit target. Some times 1st LONG, 2nd Long both SL hit, third LONG/SHORT target hit and so on.
It needs practice to get hit twice and place the right punch on third time. But the practice really worth as the BO trades offer handy margins and good profits in our total employed capital on that trade.
In overall, when it comes to BO trades, I will say that our risk:reward counts, and the courage to get hit our small SL few times before making the right big one. Hope I make sense.
But in a very good day, I get the 60 - 80 pts profits in my first or 2nd trade itself and if it happens I stop for that day and enjoying profits.
These three trades can be on the same side or reversal, it depends upon the underlying movement. Example: I place first order LONG, sl hit, Second order reversing SHORT, sl hit, third order LONG/SHORT gets the profit target. Some times 1st LONG, 2nd Long both SL hit, third LONG/SHORT target hit and so on.
It needs practice to get hit twice and place the right punch on third time. But the practice really worth as the BO trades offer handy margins and good profits in our total employed capital on that trade.
In overall, when it comes to BO trades, I will say that our risk:reward counts, and the courage to get hit our small SL few times before making the right big one. Hope I make sense.
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