Before clarifying what is an OCO order? Let's Blogtienao understand the limit orders (Limit) and the limit orders (Stop-Limit) because they are closely related to each other.
What is a limit order?
Limited order (Limit) is the order we often use to buy or sell a cryptocurrency on an exchange at the desired price.
Why use limited orders?
- Easy to use
- It is difficult to buy or sell when the market is fluctuating
- Unable to manage risks when entering orders
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 successfully bought BTC.
What is a limit order?
Stop-limit is an order to buy or sell a cryptocurrency when it reaches a certain price range, the price in this area is called a stop-price or stop-price.
It is essentially the same as Stop loss.
Why use stop orders limit?
- Avoid cases of excessive price reduction
- Easy to manage capital
- Manage the risk when entering the order
- It is easy to confuse stop-price and limit-price.
- Unable to sell desired price while placing order.
The current BTC price is 10380 USDT and you take the risk is 380 USDT for 1 BTC. Then you only need to place a stop-price order of 10010 USDT and a limit price of 10000 USDT
*Note: Because the cryptocurrency market fluctuates quite high, when placing a stop order, you must set a stop-price to be slightly different from the limit price (Limit-price) to avoid the case of not matching the order.
What is an OCO order?
The OCO order (One-Cancels-the-Other) is essentially a combination of limit order and limit stop order. When one of the two commands is activated, the remaining one will be canceled.
Why must I use the OCO command?
- OCO orders help you take profits and can cut losses with just one order.
- OCO orders overcome the disadvantages of limit orders (limit) and orders (stop-limit).
- Easy command management.
- Limit the risk of entry.
Disadvantages of OCO orders
- Easy to confuse the prices
For example OCO instruction
- In case of using buy order: BTC price is currently 9800 USDT. You want to buy BTC at 9500 USDT and at the same time you will buy if BTC exceeds the resistance of 10000 USDT (you believe that BTC will go higher if it exceeds the resistance).
- In case of using a sell order: BTC current price 10000 USDT you want to sell BTC for 10500 USDT and at the same time you will sell BTC will fall if the support level of 9900 USDT falls (you believe BTC will fall sharply if the support level is broken support).
- Buy order: Limit price
- Sell order: Limit price> current price> stop limit price.
Use the OCO order on the Binance exchange
After posting on Binance Exchange in the Basic Trading platform mode. Next, click Stop-Limit. Here you will see OCO, choose OCO and you can place orders.
As mentioned above, an OCO order will be two orders including a limit order and a limit stop order. Should set the price for OCO orders will also have two parts:
-The upper part as a normal limit order
-The section below as a limit stop command
When placing the order successfully, there will be a notice as shown below
When placing an OCO order will be two orders as shown below
On the line is the article "What is an OCO order? Learn what is cryptocurrency trading with OCO orders?"Hoping to bring you knowledge of OCO orders and how to place OCO orders on the Binance exchange.