As a forex trader, you must be familiar with the term OCO order. OCO stands for One Cancels the Other. It is a type of order that allows you to set two orders simultaneously. The OCO order is an excellent tool for managing your trades and minimizing your losses. In this article, we will explain how to set OCO in forex.
Firstly, let us understand what is an OCO order. As mentioned earlier, an OCO order allows you to set two orders simultaneously. These orders are usually a stop loss order and a take profit order. The stop loss order is placed to limit your potential loss, while the take profit order is placed to secure your profit. When one of the two orders is executed, the other order is automatically canceled.
Setting up an OCO order is a simple process. You can follow the steps given below to set up an OCO order:
Step 1: Open the trading platform
The first step is to open your trading platform. You can use any trading platform of your choice. Most trading platforms provide an option to set up an OCO order.
Step 2: Select the currency pair
After opening the trading platform, you need to select the currency pair you want to trade. You can select any currency pair of your choice.
Step 3: Place the trade
The next step is to place the trade. You can place the trade by clicking on the ‘New Order’ button on the trading platform. Once you click on the ‘New Order’ button, a window will open where you can enter the details of your trade.
Step 4: Set the stop loss and take profit levels
In the order window, you will find an option to set the stop loss and take profit levels. You can set the stop loss level at a level where you are comfortable with the potential loss. Similarly, you can set the take profit level at a level where you are comfortable with the potential profit.
Step 5: Select the OCO order type
After setting the stop loss and take profit levels, you need to select the OCO order type. You will find the OCO order type option in the order window. Once you select the OCO order type, the trading platform will automatically set two orders simultaneously, i.e., the stop loss order and the take profit order.
Step 6: Submit the order
The final step is to submit the order. You can submit the order by clicking on the ‘Submit’ button in the order window. Once you submit the order, the trading platform will execute the trade and set the stop loss and take profit levels simultaneously.
In conclusion, setting up an OCO order is a simple process. It is an excellent tool for managing your trades and minimizing your losses. By following the steps given above, you can set up an OCO order on any trading platform of your choice. However, it is essential to remember that an OCO order does not guarantee profits or eliminate losses entirely. It is merely a tool that helps you manage your trades effectively. Therefore, it is crucial to have a proper risk management strategy in place while trading forex.
