Nota: Recomendamos fortemente que você leia nossos guias sobre ordens limitadas e ordens stop-limit antes de prosseguir.
Key Points
"One Cancels the Other" (OCO) order allows you to place two orders at once. If one order is filled, the other order will be automatically canceled.
- OCO, ou “Um cancela o outro” permite que você faça dois pedidos ao mesmo tempo. Este tipo de ordem combina ordens limite e stop-limit, mas apenas uma destas duas ordens é executada.
OCO orders can make trading more flexible and secure by locking in profits, limiting risk, and automating the entry and exit process.
Note: We highly recommend that you read our guide on limit orders and stop-limit orders before proceeding.
What is an OCO Order?
OCO, or 'One Cancels the Other' order, allows you to place two orders at once. This order combines a limit order with a stop-limit order, but only one of the two can be executed.
In other words, as soon as one of the orders is partially or fully filled, the other order will be automatically canceled. Note that manually canceling one order will also cancel the other order.
When trading on Binance, you can use OCO orders as a form of trading automation. This feature provides the option to place two limit orders simultaneously, which can be useful for taking profits and minimizing potential losses.
How to Use OCO Orders?
After logging into your Binance account, go to the trading area as shown below. Click 'Stop Limit' to open the dropdown menu, then select 'OCO'.
On Binance, OCO orders can be placed as buy or sell order pairs. You can find more information about OCO orders by clicking the 'i' symbol.
After selecting the OCO option, a new trading interface will load. This interface allows you to place limit and stop-limit orders simultaneously.
After placing the OCO order, you can scroll down to visualize the details of both orders in the Open Orders section.
Limit order
A limit order allows you to buy or sell an asset at a specific price. This order appears in the order book and will only be executed at the price you set or a more favorable price.
Stop-limit order
This order has a two-step process that involves:
Stop: The price at which the stop-limit order will be triggered (e.g., 553.34 USDT). Note that the label is Stop Loss (or SL Trigger) on the OCO order interface at Binance.
Limit: The actual price of your limit order after the stop is triggered (e.g., 553.24). Note that the label is SL Limit on the OCO order interface at Binance.
Amount: The size of your order (e.g., 5 BNB).
Total: The total value of your order.
Conditions for Setting OCO Orders
For sell orders:
When holding a long position, you can set the Stop Price slightly below the main support level to minimize potential losses. A price drop will trigger the stop-loss order. The support level can act like a safety net and is identified based on past behavior that causes the asset to tend to gain buying interest.
To increase the chances of execution, you can set the Limit Price (SL Limit) slightly below the Stop Price, as shown in the example below (SL Trigger at 553.34 and SL Limit at 553.24). If the SL Limit is set above or equal to the SL trigger, there is a higher chance for the order to be left unfilled, especially if the price drops too quickly.
For buy orders:
When holding a short position and wanting to use a buy order as a stop loss, you can set the Stop Price slightly above the main resistance level to minimize potential losses. If the price rises above the resistance level, your stop-loss will trigger the buy order.
Unlike support levels, resistance levels are areas where the asset price tends to face selling pressure. For short positions, these levels can act like a safety net and are identified based on previous price action as well.
To increase the chances of execution, you can set the Limit Price (SL Limit) slightly above the Stop Price. If the SL Limit is set below or equal to the SL trigger, there is a higher chance for the order to be left unfilled, especially if the price rises too quickly.
OCO orders in practice
Consider the price range of the BNB/USDT trading pair below. The white line above is the resistance level around $590, while the white line below is the support level around $560.
Now, imagine you want to open a long position within this price range. The current price is $577.46, but you want to wait for a better entry price, which is closer to the support level (the white line at the bottom). For example, the entry price you want is $562.91.
If the price does not drop to your desired entry price, you will not make the trade. However, if it drops to your entry price, you will open a trade with a target of $589.52 and a stop-loss at $553.34.
If the price follows the blue path, your trade will result in a loss because the stop-loss will be triggered ($553.34). For the trade to be profitable, the price must follow the yellow arrow path (enter at $562.91, then take-profit at $589.52).
In this scenario, the OCO order can cover all possible outcomes, ensuring you take profits if the price moves as expected and limiting losses if the trade direction worsens.
In our example, the Stop Price is 553.34 USDT (trigger price), while the SL Limit is 553.24 USDT (the price at which the order will be placed). This means your stop-limit order will be activated when the price reaches or falls below 553.34, and the sell limit order will be placed at 553.24 USDT. However, please note that if the price drops too quickly below 553.24, there is a risk that the limit order may not be filled.
In simple terms, if BNB/USDT drops to or below 553.34, then the sell limit order at 553.24 will be placed.
Conclusion
The OCO feature is a simple yet powerful tool for you and other Binance users to trade more safely and flexibly. This type of order can be useful for locking in profits, limiting risks, and even entering and exiting positions. However, you should have a deep understanding of limit orders and stop-limit orders before using OCO orders. This knowledge will make you feel more confident and ready to trade.
Further Reading
What is a Limit Order?
What is a Stop-Limit Order?
Five Risk Management Strategies
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