One-Cancels-the-Other Order (OCO)
A one-cancels-the-other (OCO) order consists of a pair of orders that are created concurrently, but it is only possible for one of them to execute. This means that as soon as one of the orders get fully or partially filled, the other will be automatically canceled.
In essence, an OCO is a conditional order that combines a limit order with a stop-limit order, making it a basic form of trade automation. In other words, an OCO order gives you the option to place two limit orders simultaneously, making it a great tool for improving success rates (profit taking) and minimizing potential losses (stop-loss).
They may also be useful when trying to enter positions. For example, if BNB is trading between $35 and $40, you may create an OCO order that either buys on a resistance breakout (above $40) or sells if the price drops below the $35 support level. It is worth noting, however, that if one of the orders gets executed the other will be canceled. So depending on the situation, you may want to place a new order after your OCO gets triggered.
In summary, an OCO order allows you to trade in a more secure way, either by locking potential profits or limiting risks. It also provides more versatility as you can enter or exit positions without having to choose between a bullish or bearish bias. Other than that, OCO orders may bring peace of mind for traders that don’t want (or lack the time) to track the market activity on a daily basis.