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:

Price Stoploss Moves To
19800 19750
19810 19760
19820 19770

🚪 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

Step Action Description
1️⃣ Order Placement EXECUTE Validate instrument, order type, and margin
2️⃣ Order Processing Queues Above/Below, Open, Stoploss/Target queues
3️⃣ Order Modification MODIFY Update price, quantity, SL/TGT (only if pending)
4️⃣ Order Execution Active Position Order gets filled, SL & TGT set
5️⃣ Order Exit EXIT SL/TGT hit or manual exit

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