Understanding Order Management Logic in Our Trading System

📌 Understanding Order Management Logic in Our Trading System

Your trading system handles orders in multiple stages to ensure smooth execution, modification, and exit.
Here’s a detailed breakdown of how the Order Management System works.

🔹 1️⃣ Order Flow Stages

Every order follows this 5-step lifecycle:
1️⃣ Order Placement (Execute)
2️⃣ Order Processing (Queues & Validation)
3️⃣ Order Modification (Price/Quantity Adjustments)
4️⃣ Order Execution (Entry Confirmed, Stoploss & Target Set)
5️⃣ Order Exit (Profit, Stoploss, or Manual Exit)

🔹 2️⃣ How Orders Are Managed

Each order is tracked in a queue until it is executed, modified, canceled, or exited.

🛒 Order Placement (EXECUTE)

• When a trade is placed, the system validates: ✅ Valid instrument (e.g., NIFTY50, BANKNIFTY)
  ✅ Valid order type (Market, Limit, Above/Below)
  ✅ Sufficient margin availability
• If all conditions pass, it moves to Order Processing.

🔄 Order Processing (QUEUES & VALIDATION)

Once an order is placed, it moves into one of three waiting queues:

1️⃣ Above/Below Waiting Queue

• Used when a Buy/Sell is triggered at a specific price.
• Example: “BUY NIFTY at 19750 when price falls below 19800.”
• The system continuously monitors live price until the trigger condition is met.

2️⃣ Open Waiting Queue

• Holds market orders that haven’t been confirmed yet.
• Once confirmation is received, the trade moves to active positions.

3️⃣ Stoploss & Target Waiting Queue

• Manages exit conditions once a trade is executed.
• Example: “Exit when price hits Stoploss at 19750 or Target at 19900.”
• If Stoploss or Target is reached, the order exits automatically.

✏️ Order Modification (MODIFY)

• Traders can modify an order before execution.
• Allowed changes:
  ✅ Change Price (e.g., Modify NIFTY Buy from 19750 → 19740)
  ✅ Change Quantity (e.g., Increase from 1 lot → 2 lots)
  ✅ Change Stoploss/Target

⚠️ Modification is only allowed if the order is still in the queue.

• If the order is already executed, modification is not possible.

✅ Order Execution (ENTRY CONFIRMED)

Once the order gets filled, it becomes an active position.

• Stoploss & Target are automatically set.
• If Trailing Stoploss is enabled, it adjusts dynamically.

Example of how Trailing SL works:

🚪 Order Exit (TRADE CLOSED)

An order can exit in three ways:

1️⃣ Stoploss Hit

• If price moves against the trade, Stoploss is triggered.
• Example: Buy at 19800, SL at 19750 → Exits at 19750.

2️⃣ Target Hit

• If price moves in favor, Target is triggered.
• Example: Buy at 19800, Target at 19900 → Exits at 19900.

3️⃣ Manual Exit

• The user manually exits the position before SL/TGT is hit.
• Example: If NIFTY is moving slowly, the trader exits manually at 19850.

Once exited, the position resets, and the trader can place a new order.

🎯 Summary of Order Management Logic