How an OCO order works
An OCO, or one-cancels-other order, pairs two orders so that when one executes, the other is automatically cancelled. It is the standard way to bracket a position with both a take-profit and a stop-loss: whichever the price hits first closes the trade, and the remaining order disappears so you are not left with a stray order in the market.
Worked example
You buy at $50 and set an OCO: a take-profit limit at $56 and a stop-loss at $48. If the price climbs to $56, the take-profit fills and the $48 stop is cancelled automatically. If instead it drops to $48, the stop fills and the $56 target is cancelled. You never end up accidentally holding a leftover order that could open a new position against you.
OCO on Volity
The OCO is how you fully automate a planned trade: define your exit on both sides at entry and let the platform manage it. On Volity, bracketing every position with an OCO enforces your risk-reward ratio mechanically and frees you from watching the screen. It is the cleanest way to make a trade plan self-executing.
Why it matters
The OCO removes the danger of a forgotten order firing later, and it makes a two-sided trade plan run itself, which is why disciplined traders bracket every position. Use it to enforce your plan without monitoring. Related: take-profit and stop order.
Learn more in our forex trading guide.
