Binance is one of the most significant crypto exchanges, and it plans to bring OCO on Binance with no specific timeframe yet.
The CEO of Binance made such intentions known in his response to one of the exchange user, who complained about the lack of such a feature. According to the user, OCO should ensure absolute trade control.
What is OCO Order?
Order Cancels Order (OCO) comprises a stop order with a limit order. It allows users to place both stop loss and take profit targets.
An OCO (Order Cancels Order) is a double order that mandates the cancellation of one order if another order gets executed.
Example, if a cryptocurrency trades between $200 and $230, a trader could place this type of order with a limit order above $230 and a stop order below $200 (a market order will be registered). Once the price of a coin breaks above resistance or below support, a proper order is automated and the other order cancels automatically.
Automatic cancelling occurs when the corresponding order is automated at least partially. If you cancel one of the orders manually, you will have to do the same with the other order.
Investopedia suggests that traders can utilize OCO orders to trade breakouts and retracements. Traders could place an OCO order that uses a sell stop and buy stop to enter the market to trade a break above resistant or below support.
For example, if a coin is trading in a range between $30 and $32, a trader could place a buy stop OCO order just above $32 and a sell stop just below $30. Once the price goes above resistance or below support, a trade is automated, and the corresponding stop order gets cancelled. Conversely, if a trader wants to use a retracement strategy that buys at support and sells at resistance, they could place a buy limit OCO order at $30 and a sell limit order at $32.
For instance, assuming an OCO order consists of two orders;
1) A limit order to buy 600 shares of one symbol and
2) A stop order to sell 300 shares of another symbol,
If the limit price of #1 is hit and fills, the stop order #2 gets cancelled automatically.