Everything you Need to Know About OCO Orders: KuCoin Tutorial

Some exchanges offer a seamless user interface that provides easy-to-understand ways to set up OCOs. Such platforms allow users to select the number of order types they want to run simultaneously. For instance, if the stock price goes up to $55, the limit order will execute, and the stop order will automatically be canceled. On the other hand, if the price falls below $45, the stop order will execute, and the limit order will automatically be canceled.

  • The trader, named Joe, can set an entry order for Bitcoin at $20,000 and another one for Ethereum at $1,000.
  • That’s why only experienced traders use it to lower risks and enter the market.
  • Traders can place OCO orders to trade breakouts and retracement.
  • In addition, an OCO order tends to make trades easier as it allows traders to stick to predesigned trading strategies.
  • OCO (one-cancels-the-other) orders help traders protect their profits while limiting losses.

Concurrently, the $8 stop-loss order is automatically canceled by the trading platform. When the price breaks above resistance or below support, a trade is executed and the corresponding stop order is canceled. Apart from having the right zulutrade forex broker review strategy, you also need the best crypto exchange platform to ensure that you can buy and sell crypto assets easily. There are tons of cryptocurrencies, advanced tools, and effective trading strategies that promise to make you rich.

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To choose the perfect one, you need to try several or simply read reviews. It’s always complicated to define the upcoming market direction. It’s worth using the OCO order if you’re unsure about the following market trend. It saxo bank: an overview of the firm limits the risks of the wrong trade and saves time for investors. If the market has high liquidity, the OCO order can be successful. As soon as the price breaks either one or another level, one of the orders will be executed.

This is the last traded price when your buy or sell orders become active to be executed on the trading platform. For example, if the price of Bitcoin is swinging between $18,500 and $20,000, a trader can initiate an OCO order to execute a sell limit order when BTC’s price breaks beyond $20,000. If the reverse is the case (that is, the price of BTC falls below support), the OCO order will execute a sell stop order, preferably to minimize the loss. OCO feature is a simple yet powerful tool, which allows users to trade in a safe and versatile manner. This special type of order is useful in locking in the profits and limiting the risks for entering and exit positions. Whenever the limit order is triggered, stop-limit order will be canceled automatically.

Targeting Price Breakouts

Once the price breaks above or below the set limit, a trade will be executed and the second one will be canceled. The first order in the Order Entry screen triggers an OCO order (“one cancels other”—see below). When the order is filled, it triggers an OCO for your profit stop and stop-loss.

An OCO order isn’t only a way to limit risks, but a tool for famous trading strategies. The OCO order can be used both for retracement and breakout strategies. You placed a buy stop order, expecting the market to rise, and a sell stop order, considering a change of a downtrend or even a buy limit order considering a rebound strategy. In one modification of this type of condition, a one-triggers-a-one-cancels-the-other (OTOCO) order triggers two orders, as in an OTT condition. However, if either one of the second orders is subsequently filled, it cancels that remaining order. First, line up your opening order (stock/ETF, single-leg option, or futures) by using the Table or Curve Mode in the trade tab.

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It’s executed automatically when the price reaches the levels set by the trader. In another example of an OSO/OTO, a trader enters a limit order to purchase a particular stock. If this primary order is executed, then it will trigger one or more secondary limit orders to buy other stocks, perhaps in the same industry or sector.

Everything you Need to Know About OCO Orders: KuCoin Tutorial

OCO order is also effective when deciding where to invest your limited funds, especially when you are caught between two choices. Hence, you can only invest your fund in one of the two assets under consideration. Also, the OCO order helps traders base their investment decision on favorable pricing conditions. In other words, you can set up your OCO order that initiates a buy order when either of your preferred assets reaches your preferred price target. The trader in our example can set a stop-loss order if a correction pushes the price of BTC below $17,000. This order type can be paired with a sell limit order that takes profit when the price of Bitcoin hits (or goes over) the $23,000 price mark.

An OCO order is also used as a risk management tool which is often something that is overlooked. Planning ahead and knowing what risk management tools to implement is the core of managing your trading portfolio. When using OCO orders as a risk management tool, there are endless opportunities available for investors. Ultimately, regardless of the price movement, only one order is executed and remains active. Trade automation is vital for success in the volatile crypto market.

An example is the best way to show the margin requirements for a Bracket Order. Let’s say you place a buy Bracket Order on Nifty Futures where the Last Traded Price (LTP) of Nifty was Rs. 6,200. Risk rules dictate that the stop loss order must be within 5% of the price. An option chain is a list of all the options contracts available for a particular… Stock Market investment is nothing but a risk which one has to take.

Thinkorswim OCO Trade Example

Please refer to the video above or continue to the written instructions below to learn how to set up an OTOCO or OCO order in your account. One thing to note is that your assets will not be locked unless your order is triggered. If your assets are insufficient by the time you meet the trigger price, your order will fail. Once your order is triggered, however, your assets will be locked. Seasoned traders strategically place stop-limit orders by considering resistance and support levels and the asset’s volatility.

How to Replace a Bracket Order

We all know that volatility has become synonymous with the cryptocurrency market. The sell limit order gets priced above the buy order and the sell stop order, or stop-loss order, gets priced below the buy order. In this review market wizards application of an OSO/OTO, the trader has set maximum possible gains and losses on their position. Of course, if the primary buy order is not executed for whatever reason, then the secondary orders are never entered.

After lining up an eligible position in the order ticket, click the Bracket button, located in the bottom left-hand corner of the order ticket. OTOCO orders are used when creating a bracket on a new Position. OTOCO’s allow you to open a trade and simultaneously set up a profit and a stop-loss target. If your prediction is correct and the price of BTC does rise above 22,000 USDT, your sell order will be executed, and the stop-limit order will be automatically canceled. They now have the option to buy and sell crypto assets for themselves online instead of doing so through brokers and advisors. However, as with venturing into any business, you need all the knowledge you can get on how to perform most efficiently.

A type of algorithmic trading that involves the execution of a large number of orders in fractions of a sec… The applied margins are as displayed below for different stop loss prices (Minimum margin is 5%). These two orders will remain in place until either the Stop Loss or Square Off order gets hit. When one gets hit, the  algorithm automatically cancels the other. Please note that in the case of Stop Loss orders, if selecting “Absolute”, both the Stop Loss value and Trailing Ticks value will be set in absolute value (Rs) terms. If you select “Ticks”, both the Stop Loss value and Trailing Ticks will be set as per Ticks.

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