One-Cancels-the-Other Order - (OCO) Explained

A one-cancels-the-other order (OCO) is a pair of orders stipulating that if one order executes, then the other order is automatically cancelled. An OCO order combines a stop order with a limit order on an automated trading platform. When either the stop or limit price is reached and the order executed, the other order automatically gets cancelled. Experienced traders use OCO orders to mitigate risk and to enter the market.

Basics of a One-Cancels-the-Other Order - (OCO)

Traders can use OCO orders to trade retracements and breakouts. If a trader wanted to trade a break above resistance or below support, they could place an OCO order that uses a buy stop and sell stop to enter the market.

For example, if a stock is trading in a range between $20 and $22, a trader could place an OCO order with a buy stop just above $22 and a sell stop just below $20. Once the price breaks above resistance or below support, a trade is executed and the corresponding stop order is cancelled. Conversely, if a trader wanted to use a retracement strategy that buys at support and sells at resistance, they could place an OCO order with a buy limit order at $20 and a sell limit order at $22.

If OCO orders are used to enter the market, the trader needs to manually place a stop loss order once the trade gets executed. The Time In Force for OCO orders should be identical, meaning that the timeframe specified for execution of both stop and limit orders should be the same.

How to place OCO order:

Select OCO order type.

Select Base and Quote coin.

E.g. Market: BTC/LTC

Select the number of coins needs to be sold.

E.g. 10 coins. (quantity could be in the fraction)

Fill the Stop Loss fields.

Fill the Take Profit fields.