Bracket order-Fixing of Trailing Stop Loss

General
1

Sir, I am new to use Bracket order with Trailing Stop loss. Pl clarify the following trade:

  1. Buy price Rs.400

  2. Target price Rs.416 (4%)

  3. Stop Loss Price Rs.392 (2%)

  4. Trailing Stop Loss Rs.1.50

Situation: Market moves up to 408 and return to 404.

Qn: Whether the trailing stop loss reaches to 404 when the market was moved to 408 and execute the order at 404 (with profit of Rs.4.00).

Thanks

2

@400, Stop Loss = 392, Initial condition, TSL = 1.5 points

@401.5 Stop Loss = 393.5

@403.0 Stop Loss = 395.0

@404.5 Stop Loss = 396.5

@406.0 Stop Loss = 398.0

@407.5 Stop Loss = 399.5

Now price moves to 408, no change in stop loss, same as 399.5

When price comes down, the Stop Loss will stay there, it will not change

So when price comes to 404, Stop Loss will remain at 399.5

No target or Stop Loss will execute.

2 Likes
3

Thanks for reply

4

Hi @AastroGuru,
Nicely explained. So I have a doubt on TSL.
Lets take the above example.
Day 1:
Buy @400 ,SL=392, TSL= 1.5
End of day 1 the stock closes @ 407.5. So SL = 399.5 Neither target reached or sl breached. So the bracket order is cancelled around 3:20pm.

Day 2:
Before market opens my position is still open so now how should I place the bracket order?
Same like before? That is Sl=392 Target=416 and TSL=1.5?