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Market Intelligence › Basic Terminologies
Entry, target and stop loss together — and the conditions that come with them
Published by The Retail Trader · JUL 29, 2026 · Order Flow
Some order types make you define the exit along with the entry. This is good for discipline, but they come with extra leverage, and that is where the risk goes up.
A cover order requires you to place a compulsory stop loss along with the entry. Because the risk is capped in advance, the broker can give more leverage on it.
A bracket order goes one step further — entry, target and stop loss, all three together. Many times it also has a trailing stop loss option.
These order types are built for intraday, and their rules are strict:
• The position must be closed within the day — there is no carry forward.
• The broker squares off on its own at the cutoff time, even if your target is close.
• The stop loss cannot be removed, only modified.
• More leverage means a big percentage impact even on a small move.
The benefit of these order types is that they force you to think about the exit in advance. The drawback is that they also tempt you into taking a bigger position. The benefit survives only when the size stays what you would take without leverage.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics are changed by the exchanges, SEBI and RBI from time to time, so verify every number yourself with your broker or the official source.