Before clarifying what is an OCO order? Let's Blogtienao learn limit orders (Limit) and stop-limit orders (Stop-Limit) because they are closely related.
What is a limit order?
Limit order (Limit) is an order we usually use to buy or sell a certain cryptocurrency on the exchange at the desired price.
Why use limit orders?
- Easy to use
Disadvantages
- Hard to buy or sell when the market is fluctuating
- Unable to manage risk when entering orders
For example
The current price of BTC is 10380 USDT, you want to buy for 10000 USDT just place an order and wait for the order to be matched to have successfully bought BTC.
What is a stop limit order?
A stop-limit order is an order to buy or sell a cryptocurrency when it reaches a certain price range, the price of which is called the stop price or stop-price.
It is essentially the same as Stop Loss.
What is Stop Loss? How to place a stop loss order on Binance
Why use a stop-limit order?
- Avoid situations where the price drops too much
- Easy capital management
- Manage risk when entering orders
Disadvantages
- Easily confused between stop price (Stop-price) and limit price (Limit-price)
- The desired price cannot be sold while placing an order.
For example
The current BTC price is 10380 USDT and your risk is 380 USDT for 1 BTC. Then you just need to place a stop-price order (Stop-price) of 10010 USDT and the limit price is 10000 USDT
*Note: Because the cryptocurrency market fluctuates quite high, when placing a stop limit order, it is necessary to set a stop price (Stop-price) that must be slightly different from the limit price (Limit-price) to avoid the case that the order cannot be matched.
What is an OCO order?
OCO order stands for (One-Cancels-the-Other) which is actually a combination of limit order (Limit) and stop limit order (Stop-limit). When one of the two orders is activated, the other will be cancelled.
Why use OCO orders?
- OCO orders help you to take profit and also can stop loss with just one order.
- OCO orders overcome the disadvantages of limit orders and stop-limit orders.
- Easy command management.
- Limit risk when entering orders.
Disadvantages of OCO . orders
- Easy to confuse prices
OCO . command example
- Buy order use case: BTC price is now 9800 USDT. You want to buy BTC at 9500 USDT and at the same time you will also buy if BTC breaks through the resistance level of 10000 USDT (you believe BTC will go higher if it breaks the resistance level).
- Sell order use case: BTC current price 10000 USDT you want to sell BTC 10500 USDT and at the same time you will sell BTC will fall if the support level is breached 9900 USDT (you believe BTC will fall sharply if the support level is breached). aid).
*Note:
- Buy order: Limit price
- Sell order: Limit price>current price>stop limit price.
Use OCO order on Binance exchange
After logging in Binance Exchange in Basic Exchange mode. Next, click Stop-Limit. Here you will see OCO, select OCO and you can already place an order.
As mentioned above an OCO order will be two orders including limit order and stop limit order. The price setting for the OCO order should also have two parts:
-The upper part is like a normal limit order
-The part below as a limit stop order
When the order is placed successfully, there will be a message as shown below
When placing an OCO order, there will be two orders as shown below
Conclusion
On the line is the article "What is an OCO order? Learn what is trading crypto with OCO order?” hopes to bring you knowledge about OCO order as well as how to place OCO order on Binance exchange.
