What is a One-Cancels-the-Other (OCO) Order?
1. One-Cancels-the-Other (OCO) Orders Explained
OCO (One-Cancels-the-Other) orders, also known as selective entrustment orders, combine a stop limit order and a limit order into a single OCO order for placement. When the stop limit order is triggered, or when the limit order is executed / partially executed, the other order is automatically canceled. If either order is manually canceled, the corresponding order is simultaneously canceled as well.
OCO orders aim to secure better execution prices while ensuring buy/sell fulfillment. In spot trading, investors can utilize this trading strategy when they wish to set both a stop limit order and a limit order simultaneously.
2. Advantages of OCO Orders
2.1 Risk Control
Spot OCO orders allow investors to simultaneously set TP/SL orders and limit orders, thereby helping investors better control risk.
2.2 Mechanical Execution
Spot OCO orders are automatically executed by the trading system without the need for manual intervention by investors. This mechanical execution can assist investors in avoiding emotional decision-making and erroneous judgments, enhancing trading discipline.
2.3 Increased Efficiency
By employing an OCO order strategy in spot trading, investors can set both stop-loss and take-profit trigger prices and limit price simultaneously, eliminating the need to set two separate orders. This can save monitoring time and energy, leading to increased trading efficiency.
2.4 Avoidance of Overlapping Trades
A distinctive feature of spot OCO is that when one order is executed, the other order is automatically canceled. This helps avoid overlapping trades, preventing unnecessary risks.
3. Trading Scenarios
The OCO spot order strategy is suitable for trading scenarios that require flexibility in responding to market fluctuations, risk control, and mitigation of uncertainty.
3.1 Buying
- Traders hope to buy at a lower cost during a pullback but fear missing out if there is no pullback and the price rises. Therefore, if there is no pullback and the price rises, the system needs to buy at the specified price.
- In this case, the spot OCO order includes a stop-loss buy order and a limit buy order.
3.2 Selling
- Traders believe there is still some upward potential from the interim high and want to sell at the highest point but fear a direct decline, resulting in profit loss. Therefore, if there is a direct decline, the system needs to sell at the specified price.
- In this case, the spot OCO order includes a stop-loss sell order and a limit sell order.
3.3 Price Limitation
- Sell Order: Price (Limit Order) > Current Market Price > Stop-Loss Trigger Price (TP/SL Order)
- Buy Order: Price (Limit Order) < Current Market Price < Stop-Loss Trigger Price (TP/SL Order)
4. How to Place a OCO Spot Order?
4.1 MEXC Website
4.1.1 Log in to MEXC and Visit the Spot Trading Platform
After entering the official MEXC website, click on [Spot] to open the spot trading interface.
4.1.2 Confirming Buy/Sell Prices
Based on market analysis and your investment plan, determine at what price you want to buy/sell assets.
4.1.3 Setting Parameters
4.1.3.1 When Choosing to Buy Assets
You need to set both stop-loss and limit prices:
- The stop-loss buy order is the price at which the asset will be automatically purchased when the price rises to a certain level.
- The limit buy order is the price at which the asset will be automatically purchased when the price falls to a certain level.
4.1.3.2 When Choosing to Sell Assets
Similarly, you need to set both stop-loss and limit prices:
- The limit sell order is the price at which the asset will be automatically sold when the price rises to a certain level.
- The stop-loss sell order is the price at which the asset will be automatically sold when the price falls to a certain level.
4.1.4 Place Order
After confirming that the parameters are correct, submit the order.
4.1.5 Order Execution
Once the order is submitted, you need to closely monitor the market conditions. When the price reaches any of the conditions you have set, the system will automatically execute the corresponding buy/sell operation and cancel the other conditional order.
Note
- In the spot OCO strategy, these two conditional orders will exist as a pair, and once one of the conditions is triggered, the other will be canceled.
- Tutorials and guides may vary across different operating systems. Please refer to your actual operating system.
4.2 MEXC App
4.2.1 Log in to the MEXC Spot Trading Platform
4.2.2 Confirm Buy/Sell Prices
Based on market analysis and your investment plan, determine at what price you want to buy/sell assets.
4.2.3 Set Parameters
4.2.3.1 When Choosing to Buy Assets
You need to set both stop-loss and limit prices:
- The stop-loss buy order is the price at which the asset will be automatically purchased when the price rises to a certain level.
- The limit buy order is the price at which the asset will be automatically purchased when the price falls to a certain level.
4.2.3.2 When Choosing to Sell Assets
Similarly, you need to set both stop-loss and limit prices:
- The limit sell order is the price at which the asset will be automatically sold when the price rises to a certain level.
- The stop-loss sell order is the price at which the asset will be automatically sold when the price falls to a certain level.
4.2.4 Place Order
After confirming that the parameters are correct, submit the order.
4.2.5 Monitor Orders
Once the order is submitted, you need to closely monitor the market conditions. When the price reaches any of the conditions you have set, the system will automatically execute the corresponding buy operation and cancel the other conditional order.
Note
- In the spot OCO strategy, these two conditional orders will exist as a pair, and once one of the conditions is triggered, the other will be canceled.
- Tutorials and guides may vary across different operating systems. Please refer to your actual operating system.
5. Summary
Spot OCO (One-Cancels-the-Other) Orders are an investment trading strategy that involves setting two conditional orders, with one automatically canceling the other when one is executed. It is used for risk control and selecting entry points.
Risk Disclaimer: The advantage of the spot OCO strategy lies in its ability to help investors achieve risk control and automate trading. However, the disadvantage is that the strategy may not execute as expected due to intense market fluctuations. When employing an OCO order strategy for spot trading, it is essential to closely monitor market volatility and risks, ensuring that your trading strategy aligns with investment goals and risk tolerance.
Disclaimer: This information does not provide advice on investment, taxation, legal, financial, accounting, consulting, or any other related services. It is not a recommendation to buy, sell, or hold any assets. MEXC Learn provides information for reference only and does not constitute investment advice. Please ensure a full understanding of the risks involved and invest cautiously. User investment activities are independent of this site.