OCO Orders: How to Automate Your Trades with Dual Strategies

OCO orders represent a revolutionary solution for traders seeking to optimize risk management without being glued to the screen. By linking two conditional orders with an automatic cancellation mechanism, an OCO order allows for the simultaneous execution of different strategies, activating one when the other is canceled. This functionality transforms how operators plan their market moves, offering automatic control over their positions.

What is an OCO order and how does it work?

An OCO (One Cancels the Other) order is simply two linked conditional orders, where executing one automatically cancels the other. When you set an OCO order, the system allows you to configure two price levels simultaneously: an upper and a lower level relative to the current market price.

When the price reaches either of these levels, the corresponding order is executed at the market price or the specified limit, while its partner is instantly canceled. All this happens without any action on your part. It’s like having two automatic guards watching two different entry points in your trade.

Key advantages of OCO orders for risk management

Simultaneous control of multiple scenarios
With an OCO order, you can prepare for two opposite situations at once. For example, if you expect an asset to rise but want to protect against a fall, you set both orders at once. The system handles the rest.

Total process automation
No need to constantly monitor the market. Once your OCO order is set, automatic execution saves you time and reduces emotional errors. The automatic cancellation of the unexecuted order happens instantly, with no delays.

Efficient margin calculation
Margin requirements are calculated on the same asset, not doubled. This means your capital is better optimized when using OCO orders compared to placing two separate orders.

Flexibility in order types
You can mix conditional market orders with conditional limit orders. One can execute at the best available price (market), while the other waits for an exact price (limit).

How it works: the two directional triggers

Every OCO order is structured with two activation points (triggers): the upper trigger and the lower trigger. Imagine the current price of an asset is $27,000. Your OCO order could be configured as follows:

• Lower trigger: $25,000 (below current price)
• Upper trigger: $30,000 (above current price)

When the price hits either level, that trigger activates and executes its associated order, while the other trigger is automatically deactivated. The important part is that you only pay the cost of one order, not two separate orders.

Differences between buy and sell orders

In a buy OCO order, the lower trigger (take profit) should be below the current price, aiming for a dip to buy cheap. The upper trigger (stop loss) will be above, protecting you if the price rises too quickly.

In a sell OCO order, the upper trigger (take profit) is above the current price, expecting a rise to sell for profit. The lower trigger (stop loss) is below, protecting against unexpected drops.

Practical example 1: Entry strategy with an OCO order

Imagine you are Trader A. Bitcoin is trading at $27,000, with resistance at $30,000 and support at $25,000. You want to enter a position if either: the price drops to $25,000 (bounce from support) or breaks resistance at $30,000 (uptrend).

You set a buy OCO order:

1. Lower trigger at $25,000 with a conditional market order (to catch the bounce)
2. Upper trigger at $30,000 with a conditional market order (to follow the bullish momentum)

If the retracement scenario occurs: Bitcoin drops to $25,000. Your buy order activates and executes at market price. Your $30,000 order is automatically canceled.

If the breakout scenario occurs: Bitcoin rises directly to $30,000 without dropping. Your $30,000 order activates, executes, and your $25,000 order is canceled. In both cases, your OCO order has entered you into the position without you having to monitor the chart.

Practical example 2: Protected exit strategy

Now you are Trader B. You own 2 ETH bought at an average price of $1,500. The current price is $1,700, and you expect it to rise to $2,000, but want to protect yourself if the market turns downward.

You set a sell OCO order:

1. Upper trigger at $2,000 with a conditional market order (take profit)
2. Lower trigger at $1,500 with a conditional market order (stop loss at breakeven)

Profit scenario: ETH rises to $2,000. Your take profit order activates, selling at market price, and your stop loss order is canceled. You exit with gains.

Loss scenario: The market drops, and ETH falls to $1,500. Your stop loss order activates, selling at market price, and your take profit order is canceled. You limit losses.

With this setup, you can sleep peacefully knowing that regardless of market movement, your strategy is automatically activated.

Important limitations to know

Not available via API: If you trade through API, OCO orders are not available. Developers can replicate this functionality in their own systems.

Spot and margin spot only: OCO orders work exclusively on Spot or Spot with margin. If you trade futures or other derivatives, this feature is not accessible.

Risk with limit orders: Here’s a critical detail: if you set an OCO with conditional limit orders, there’s a possibility that your limit order triggers (reaches the trigger level) but does not execute (price doesn’t reach the limit). When the limit order triggers but doesn’t fill, its partner order is canceled anyway. This happens because the system treats the OCO pair as an indivisible unit.

Margin requirements: Although more efficient than two separate orders, ensure you have sufficient available margin for either order to execute.

How to monitor your OCO orders

Tracking your OCO orders is straightforward. Within your trading interface:

• Go to the Active Orders tab to see all pending OCO orders
• Check the Order History to review which OCO orders were executed and which were canceled
• Access the Unified Trading Account Orders section → Spot Orders → Current Orders for a centralized view
• Review the Order History in the same section for historical analysis

These records allow you to audit your strategies and understand how your OCO orders performed under different market conditions.

Conclusion: Automation as a competitive advantage

An OCO order transforms your trading by eliminating the need for constant monitoring and impulsive decisions. By linking two strategies simultaneously, you achieve automatic coverage that adapts to market movements. Although it has limitations (API availability, specific markets, risks with limit orders), for spot traders, this feature represents a significant step forward in professional position management.