You are here: Educational Videos » Forex » Adding OCO Orders on Stops and Limit Orders
Track 'n Trade LIVE Forex
How To Add OCO (One-Cancels-Other) Orders on Stop and Limit Orders
Video Transcript
Now in this next example I want to take you through and I want to show you another way we can use OCO orders. The first example I showed you, we added an OCO order to a position that was already active in the market. We were already in the market, and we added OCO's. Now, we want to be able to add an OCO setup order to an open order, or one that has not yet been filled.
Let's come in here with a stop order, we're going to place that above the market. We're going to say- if the market comes up and gets us into the stop order, this is our stop order here. The stop order is going to indicate that we are long the market, indicating that we are actively looking for the market to continue to rise in price. If that happens we want to automatically place OCO orders on this order, but we don't want those OCO orders to be active until this stop order is filled. So we right click on the open order, we say add OCO. We now have the orders, again, same as before- sliding up and down on the screen. We can place those, we can move them independently. We can bring them up and we can say, if the market reaches this level, stop me out. If the market reaches this level, take my profits, but this is not going to go into effect, until the first order or the master order is filled. For example- if the market rallies, the stop order is filled, these two orders then become active.
You'll notice that down here in the accounting window, in the pending orders, that these two orders- the limit and the stop are not indicated. That's because the stop order has not yet been filled, or the trigger order. The market must rally first, fill the trigger order, which then will place the two OCO orders into the market. They will then become pending, then if the limit order is hit, it will automatically cancel the stop order. If the stop order is hit, it will automatically cancel the open order.
Now, let's say for example we have this stop order sitting here, it is not filled, and the market drops down to this level down here; and it touches the price level of this OCO stop order, what happens? Nothing! Nothing happens because this order is not yet pending. The only way this order will become active and pending, is if this order or the master order is filled first. So, by having the market drop down and go at this direction, we will not have an order filled; either with this order, or this order. Neither one of those orders will be filled, because the market went the wrong direction, or against the position in which we anticipated.