Bracketed Orders in Stock Trading (2)

The main advantage of bracketed orders is that you, the investor, determine how much you will earn or lose when getting involved in stock trading.



If you have a total investment amount of $150,000 and you determine that you do not want to lose more that 20%, then your total losses should not be set below $30,000.



However, if you invest $150,000 into the stock market and you would like to earn a 15% profit, then you should set your profit margin to equal $172,500.



With bracketed orders you, the investor, are in total control of your investment.



The two main disadvantages with bracketed orders you must place a limit on how much profit that you will make and you could possibly lose a large sum of money.



First of all, when an individual decides to invest in the stock market, he or she probably wants to make as much money as possible.



By setting a bracketed order on stocks that the investor purchases, the investor is placing a limit on how much profit is able to be earned.


Also, to be noticed, by placing a bracketed order on your stock you run the risk of losing money.