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OCO Order Meaning

An One Cancels the Other (OCO) order is a sophisticated trading tool that combines two different orders: a limit order (to take profit) and a stop-limit order (to stop loss). They are linked together by the trading engine.

For example, if Bitcoin is at $50,000, you might set an OCO order to SELL if the price hits $55,000 (Take Profit) OR if the price drops to $48,000 (Stop Loss). If the price rises to $55,000, the take-profit order executes, and the system automatically cancels the stop-loss order at $48,000.

This is crucial because it prevents the risk of the price dropping later and triggering the second order, which would leave you with an unintended short position.

It allows traders to "Set and Forget" their strategy, protecting their downside and locking in upside without staring at the screen all day.

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