One Cancels Other (OCO)
Order TypesA pair of linked orders where filling one automatically cancels the other. Commonly used to set both a stop-loss and take-profit around an open position.
What Is a One Cancels Other Order?
A One Cancels Other (OCO) order links two pending orders together. When either order is filled, the other is automatically cancelled. The most common use in forex is combining a Stop-Loss and Take-Profit on an open position: when one triggers, the other becomes unnecessary and is removed.
OCO Order Example
You buy EUR/USD at 1.0850 and want to exit either at 1.0920 (profit) or 1.0810 (loss). You create an OCO with a sell limit at 1.0920 and a sell stop at 1.0810. If the price rises to 1.0920, the sell limit fills and the sell stop at 1.0810 is cancelled. If the price drops to 1.0810 first, the sell stop fills and the sell limit is cancelled.
OCO for Entry Orders
OCO can also be used for entries when you expect a big move but are unsure of the direction. For example, before a major news release, you might place a buy stop above the current range and a sell stop below it. Whichever direction breaks first fills your entry, and the other order cancels. Many trading platforms support OCO order groups in their order management interface.
Related Terms
One Triggers Other (OTO)
An order setup where filling the first order automatically activates a second (or second and third) pending order. Used to automate entry and exit in one setup.
Stop-Loss
An order that automatically closes a position at a predetermined price to limit losses. The most important risk management tool in forex trading.
Take-Profit
An order that automatically closes a position at a predetermined price to lock in profit. It is the profit-side counterpart to a stop-loss.
Limit Order
An order to buy below or sell above the current market price. Limit orders guarantee price but not execution.