Simplify your Trades by Making use of OCO Order The steady increase of crypto trading platforms and exchanges has given rise to a number of ways and strategies to trade cryptocurrencies. These exchanges provide an opportunity to traders to utilize a number of tools to estimate the best trading strategy from a fundamental and technical perspective. Now, traders can place buy and sell orders easily on the trading platforms by making use of automatic crypto trading tools like trading bots, crypto signals, etc. Today, the best crypto trading platforms like TrailingCrypto have come up with a new smart trading feature, i.e. OCO order. OCO stands for One-Cancels-The-Other order which consists of a pair of orders which are created concurrently, but one of them could be executed. This means that as soon as one order is partially or fully filled, the other one will be cancelled automatically. What is an OCO order? This is a kind of special order that enables traders to place two separate orders at the same time. In this order type, a limit order with a stop-limit order is combined, but only one of them is executed and other one is cancelled. This means, the traders can manage their risks effectively by placing a take-profit, and stop-loss order. By using OCO orders, you can automate your trades effectively, and reduce the need to monitor the trade actively.
How to use OCO Orders? OCO orders are very easy to use and can be set easily on trading platforms by using trading bots. Firstly, you are required to open a position using the limit buy order or a market buy order. Once the position is opened, you can follow the steps given on the exchange platform easily. Let’s discuss the same with an example: Suppose you bought 1 BTC at a price of $5,150 and want to sell 1 BTC at $5,500. But you also want to make sure you don’t lose more than $150. Therefore you want to place a stop-loss at $5,000. First, you navigate to the correct trading pair, which is ETH/USDT. Then you scroll down to the trading menu and hover over stop-limit, there you can select OCO. Then, you may enter the price as $5500 as this is the place where you want to earn profits. And, now you can fill in $5000 on stop and limit. After setting all this, you may buy or sell an order using the given instructions. When to use OCO orders? This smart trading feature allows users to take advantage of a number of real-life use cases which you may face on daily basis. Let’s understand the same with the below examples/use cases: Stop-loss and take profit Selling up SL/TP is one of the most popular scenarios of crypto trading by using an OCO order. This presents that you have some base currency in your account. Firstly, you will place a limit order as your take profit, and link it with stop loss order. The stop market order will guarantee that if the price reaches to the bottom mark, you will exit the trade at the best possible prices. Exit or averaging down Another most interesting scenario of using OCO order is averaging down the buying price. You will find it useful whenever you need to decrease an average buying price of an asset to increase or exit the position on your defined terms. Place a limit sell order to exit a position in case the price reaches to the desired mark, or place a limit buy order to accumulate more coins and reduce the average purchase price. In case the limit buy order is filled, OCO feature will cancel the limit sell order, and vice versa. Buy more This strategy works best when you intend to increase the volume of your base currency during the market dips or anticipate in case of a breakout. In this scenario, you will place
a limit buy order to buy the dip to accumulate more coins whenever the price reaches the support line. You will place a stop buy order to buy on a breakthrough coin in case it breaks the resistance line. But with OCO feature, the system will cancel the limit buy order in case of price rush. Benefits of OCO orders OCO orders, if used in the right way, may prove to be great so as to improve your crypto trading experience. Here are the key benefits of using OCO orders: 1. Secures profits for the opening positions: The expert traders protect their winning positions by setting up OCO orders with minimum profits to protect their earnings even in case of an unexpected trend reversal. Set up your profit target with a limit order, and then use OCO order to link it with a stop order to protect the potential returns. 2. Improves risk-reward management: OCO orders allow traders to set a predefined risk-to- reward ratio. In this order type, by setting predetermined stoploss and take-profit, you may increase your control over funds. 3. Less market monitoring: This is the most important feature of the OCO orders. No matter what kind of strategy you are considering and how much funds you are allocating for the day trading, automated crypto trading feature will simplify the task and let you spend more time in market research rather than monitoring the charts. The expert traders use OCO orders as a tool to limit the trading risks while entering a position. And, the risk management feature of this order type makes it more useful.
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