# How to Use Bracket Orders > A bracket order pairs your entry with a take-profit and a stop-loss. Learn how it works and how to place bracket orders in the ForexThrive trading simulator. - Source: https://forexthrive.com/guide/how-to-use-bracket-orders - Author: ForexThrive Team - Published: 2023-09-03 - Publisher: ForexThrive (https://forexthrive.com/) A bracket order wraps an entry with two exit orders: a take-profit limit on the profitable side and a stop-loss on the losing side, so every trade has a defined target and maximum risk. In the ForexThrive simulator you set pip distances for Auto TP and Auto SL, and each market order gets both attached automatically. A bracket order is a type of conditional order. Conditional orders are those in which the execution of one part of the order is contingent upon the fulfillment of certain conditions, such as a specific price level being reached. You can use it in our app, test strategies using bracket orders and automate your backtesting process. A bracket order is a more comprehensive order type that consists of three separate orders: an entry order (in the app, a market order), a limit order to take profits (profit-taking order), and a stop-loss order. Here's how a bracket order typically works: 1. **Market Order:** This is the initial order to buy or sell a security at the current market price. It is executed immediately. 2. **Limit Order (Profit-Taking Order):** Along with the market order, a limit order is placed at a specific price level above your entry price if you're buying (or below if you're selling). This order is intended to lock in profits when the security's price moves in a favorable direction. 3. **Stop-Loss Order:** Another order is placed, typically below the market price for a long position (or above for a short position). This stop-loss order is meant to limit potential losses by closing the position (a sell for a long, a buy for a short) if the price moves against you. ## How to use it in the App Using bracket orders in 3 steps: 1. Settings -> check the Auto TP and Auto SL boxes 2. Set pip targets for the Take Profit and Stop Loss (TP/SL) 3. Create a trade using a market order -> TP/SL auto-created ## Tips for backtesting with bracket orders Bracket orders are most useful when you treat them as part of your strategy rules, not as an afterthought. A few habits make your backtests more reliable: - **Size the stop from the chart, not from a round number.** Place the stop-loss where your trade idea is proven wrong (for example, beyond a recent swing high or low). Then set the position size so that the loss at the stop matches the risk you accept per trade. - **Know your break-even win rate.** With a take-profit twice the size of the stop (for example, 40 pips vs 20 pips), you need to win just over one trade in three to break even before costs. With equal distances you need to win more than half. - **Account for costs.** Spread and commission come out of every trade, and they matter most when targets are small. When you backtest, compare the fees shown on each position with your average take-profit. - **Keep the distances fixed while you test.** Changing TP/SL settings in the middle of a run mixes different strategies into one set of results. Finish a run, review your metrics, and only then adjust the pip targets. - **Watch drawdown.** A run of stop-losses adds up quickly. Every game has a maximum drawdown limit (fixed at 10% on the free game), and reaching it ends the game. If you want a take-profit and stop-loss that only activate after a pending entry fills, rather than a market entry, see [how to use OTA orders](/guide/how-to-ota-orders). ## Frequently asked questions ### What are the three parts of a bracket order? An entry order (in the simulator, a market order), a take-profit limit order placed beyond the entry in the profitable direction, and a stop-loss order on the other side. For a long trade the take-profit sits above the entry and the stop below it. For a short trade it is the reverse. ### What happens when one side of the bracket is hit? The exit that is reached closes the position. Both bracket orders match the original position size, so one fill closes the whole trade. In a standard bracket, the remaining exit order is then cancelled, so you can't accidentally open a new position in the opposite direction. ### Why use bracket orders when backtesting? They make every trade follow the same predefined risk and reward, which removes hesitation and lets you replay faster without watching every bar. Consistent exits also make results comparable across trades, so your win rate, profit factor and drawdown reflect the strategy rather than ad-hoc decisions. ### How should I choose take-profit and stop-loss distances? Base them on your strategy and the instrument's typical volatility, then test. With a 20-pip stop and a 40-pip target, for example, you need to win just over one trade in three to break even before costs. Include spread and commission, which hurt short targets most.