An OCO order, short for one-cancels-the-other, is a type of advanced order commonly used in cryptocurrency trading where traders set two orders simultaneously (often a limit order and a stop order) with the idea that if one of the orders gets executed, the other order is automatically canceled.
Buy Limit Order: This is the price at which a trader wants to buy a cryptocurrency. It’s set below the current market price, indicating the maximum price they are willing to pay.
Sell Limit Order: This is the price at which a trader wants to sell the same cryptocurrency. It’s set above the current market price, indicating the minimum price they are willing to accept for selling.
Stop Order: Stop orders execute a market order when the bid or ask price reaches or crosses a certain level.
Once either the limit or stop order is executed, the corresponding order is automatically canceled. This helps traders manage their trades more effectively and plan for both potential profit-taking and limiting potential losses.
