Earlier I explained the variations of exiting a trade once you are already in a trade. The two ways to exit is to Stop for loss or Limit for profit. If you have a trade already engaged (say you manually entered at current market price) and if you want to have both a Stop for loss and a Limit for profit placed on that trade then you would use an “OCO”. OCO places the two entry orders (that would cancel the existing trade, either for profit or for loss) and once one of those two orders gets triggered then the other one just disappears (since it is no longer needed). This is why this form of order is called “OCO” because one of the orders will cancel the other (One Cancels the Other). If, for example (this is one of the four variations explained earlier), you are active in a trade going long (up) then you will set the OCO to have two orders; one as a Sell-Limit (above current market price – this is your Limit for profit), and the other as a Sell-Stop (below current market price – this is your Stop for loss). Here is what an order box looks like for this type of order:
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