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How can I use “one cancels other” orders?
One cancels other orders (“O.C.O” orders) that are not related to a position can be used to place a stop loss and take profit order on a net position, where one is cancelled if the other is executed (also known as "bracket orders"). This is useful, for example, when you have traded in and out in an instrument during the day, and want to protect your net position overnight.
In the example below the client has been trading in and out of CHFJPY intraday. He now has a long exposure of CHF 700,000 and wants to add a protective stop and a take profit order on the net exposure. This cannot be done with related orders, as they can only be placed on the individual position.
1) Right click on the net position;
2) Select Forex Orders;
3) Tick the "O.C.O." tick box;
4) Change to "Sell" (given that the position is "long" the orders must be "sell");
5) Input the desired take profit level;
6) Input the desired stop loss level.
Now you can place the pair of orders.
In Open Orders, you can now:
1) Check that the amount is the same and the orders are in the opposite direction as the position;
2) Verify that the two orders have a relation between them;
3) Observe that they are not related to a position.
#3 is important. If you use the "stand alone" O.C.O. orders in this way, they will not be cancelled if you close the position manually. So, it is your responsibility to cancel these orders manually if you close the position manually.
Of course, if you want to add only a stop order to protect the net position (or possibly a trailing stop) that would be possible as well. Simply add a non-related stop-order for the amount of the net position. Take care to remember that the order is not related to the position, meaning that you would have to cancel the order manually if you close the position out directly at market yourself.