

To use a bracket order in Trader Workstation, first select your desired ticker and enter the primary order details like prices, order type, and whether the order is for the Day or “GTC” (Good Till Canceled).
Check the “Bracket” option to attach stop loss and take profit orders.
Set your stop loss to a protective price level and define your limit sell order for taking a profit.
Adjust the default offset based on your trading strategy.
Finally, Right-click on the order entry window to verify all orders transmitted simultaneously, and your bracket is set!
Now that you have the basics down let’s jump into some more information about brackets with TWS,
Contents
Understanding Bracket Orders
Brackets are one of the most beneficial tools in trading.
A bracket order pairs your entry order with two opposite orders: a stop order to limit losses and a limit order to take profits.
This setup helps you manage risk by providing predetermined exit points without having to constantly monitor prices.
The default offset for bracket orders is set to 1.0, but you can adjust this through order presets to fit your trading strategy.
When the entry order executes, the associated limit and stop orders are automatically generated and held by either the application or the trading server waiting to get filled.
If the market price reaches one of the limit orders, it executes the order it hits, either stopping the trade-out or executing the take-profit order.
The other pending order is then canceled automatically.
Bracket orders are particularly beneficial in volatile markets, as they allow you to lock in profits or limit losses effectively even if the price is moving quickly.
By using bracket orders, you can trade more confidently, knowing you have a plan for both profits and losses.
Configuring Your Orders In TWS
When you’re ready to configure a bracket order in Trader Workstation (TWS), start by right-clicking on the chart or order entry window to access the “Order Settings” gear icon.
This will allow you to customize your order settings.
Make sure the “Bracket” option is checked; this enables both pending orders to be sent when the opening order is executed.
Next, set your desired quantity and choose the appropriate order types, typically including a Limit Buy or Sell and corresponding exit order information.
Don’t forget to adjust the default offset from the current price, usually defaulted to 1, to properly set up the exit prices.
This default can also be changed in the global settings for the platform if you are always trading with the same stop/profit prices.
Finally, select “Apply offset to parent” to ensure the offset is applied to the fill price when the order is executed.
Best Practices
Now that you understand how to use brackets in Trader Workstation (TWS) let’s look at some best practices for using them.
Having a clear entry signal/strategy is vital to the success of anything in trading.
The best risk management profile in the world can’t help if you are buying the top and selling the low.
Entry points should be grounded in solid analysis, market trends, and trading strategy, not an impulsive entry due to FOMO or a “Hot Tip.”
By sticking to a predetermined strategy, traders can avoid the pitfalls of chasing trades, which often leads to overtrading or entering positions with poor risk-reward ratios.
Pre-planned entries allow traders to focus on execution rather than reacting to every price fluctuation.
Next, look to set up a solid risk-reward ratio.
Many traders aim for a minimum 1:2 ratio, where potential gains are at least double the potential loss.
This ratio, anchored by technical levels like support and resistance, strengthens the trade’s structure and also takes a lot of pressure off the trader having to be correct.
Additionally, letting winners run by taking a portion of the trade-off in profit can help further skew the risk: reward ratio in your favor.
Another thing to look for is where to place stop losses.
While many traders have a fixed risk-to-reward ratio, it is often better to set a stop where a trade becomes invalidated.
This also goes back to the entry criteria.
If you have a 50-point stop until the trade is invalid, you have a poor entry location (in most cases).
Position sizing is another vital aspect of bracket order management.
Determining a position size before placing the order ensures that the trade fits within the trader’s risk tolerance and doesn’t overextend their capital.
A good way to adjust this up or down is to use a percentage of capital per trade.
So, on a $100,000 account, you might want to risk 5% or $5,000.
If your stop loss is 10 points and the stock is trading at $50/share, your trade size should be roughly 450.
If the stop loss is hit completely, you will lose roughly $5,000.
Lastly, though bracket orders are designed to be “set and forget,” periodic monitoring is still necessary, especially if you use a dynamic stop like a moving average.
The stoploss side of the bracket would need to be updated near-daily around the close/open.
Also, periodically monitoring both the stocks you are trading and the market as a whole can save you from potentially unnecessary losses.
For example, if you are long a stock and it keeps making lower highs, it could be a good time to exit for whatever profit or loss you have and look to re-enter later.
Just because the bracket is there does not mean you have to use it 100% of the time.
Constant tinkering is also a problem, so know the difference between the reason for exiting and just wanting to tinker.
Conclusion
Mastering bracket orders in Trader Workstation gives traders a structured way to manage their trades, safeguarding against volatile swings while keeping emotions in check.
By pairing well-chosen entry signals with a strategic stop and profit level, traders set the groundwork for consistent, disciplined trading.
Applying these methods allows for greater focus on execution rather than the constant monitoring of price movements, freeing up mental energy to analyze market conditions objectively.
Bracket orders can empower traders to approach each trade with a clear plan, minimizing risk and optimizing potential rewards, making them an invaluable tool for beginners and seasoned traders.
We hope you enjoyed this article on how to use a bracket order in Trader Workstation.
If you have any questions, please send an email or leave a comment below.
Trade safe!
Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.