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“This video. We re going to talk about what is an o co order. Stay stay tuned a trade is a very warm welcome to so in this video. I going to talk about what is an o co order and how we can use it to mitigate our risk in trading so o co stands for one cancels.
The other we re going to do is i run through example as to when we might want to use that kind of order. And then let s just put an order through a platform and just see exactly how would work it in real life. So i ve got a pair us dollar jpy us dollar yen. I got a daily charts at daily candles.
I m just looking here and let s just say for argument s sake for this video that i kind of come along and i d said okay. I think we ve got a you know trend here trend line here are we above this one twelve little you know i want to take a short. So i got down on my lower timeframes mate look at the hourly and i would say okay it looks very nice. What would i do okay let s take a short here let me put my stop at 1350 and where s my target.
Gonna be let s go with that 11 50. So i kind of got my ideas in my mind. Now you could be doing this obviously on your brokerage platform directly on the chart. There we go and charting package.
It doesn t really matter we just packaging. This trade together. Now see how we d use this oh co order type. So there let me get that back up there.
There we are so that s kind of how we re gonna frame this trade let s remove that trendline so we re gonna go that s our target. We could have a target down there of 1150 and we re gonna have stopped there at 1350. I m gonna go short..
Whatever the market price currently is okay. So an o co order is basically an order that says okay do you know what one has to cancel the other so if we go short. Here at 7th current price. Which is a 11275 seven five six seven five seven whatever it may be and we enter a take profit or a limit by which will cover our shorter forget for going short with selling something to color that we re gonna buy our limit would be 111 50.
And then i ll stop will be one third 50. In this example. Sono. Co.
Author basically says one cancels. The other so if either of those are filled. Then please cancel the other one so what the two scenarios that we could get here we could take our shore and we unfortunately could be stopped out in which case as the market pushes up to this thirteen fifty level. Our stop will be triggered by stop which we treat because we re short so it s buying back at a loss.
We close the positioner. A lot of coders short our loss this limit down here would automatically be canceled after that stop was executed. So it s not left in and then look at the other scenario is that the trade goes our way market drives down comes down to one 1150. We get filled in our limit.
We take our profit. The stop above us gets cancelled automatically as well now why would we want to do that because the reason we want to do that is because we wouldn t want to leave a limit or a stop order in the market. Without any corresponding or well. There are some circumstances where you might.
But no for our for our all intents and purposes. You don t want to if you re structuring. A trade where you re in here..
You ve got a limit you ve got to stop you know once the trade is done you don t want any contingent kind of orders hanging around that are attached to that trade and what would happen if you didn t have a no co warden. If you just said hey listen don t do anything once you fill one of these orders don t cancel the other then you would have that order left in the market. And let s look at that scenario. Now let s say for example.
We came down market pushed down you were very happy you ve got your limit filled. You took whatever that is a hundred and twenty five twenty eight pips out of the market. But this order is still left in the market. It s not a note hasn t been oc owed.
It s not being counseled. It s still left in there you forget about it a couple of days later couple of weeks later the market then pushes back up goes through that 11350 all of a sudden now you re long at one 1350 because that stop order how that buy stop is executed and because no corresponding short to cover it you re actually now long so and you might forgot about a minor one it knows all sorts of reasons. So osio water mitigation or risk. It allows you to put a bracket around your trade and say hey here s my entry here s my exit here s my exit.
If i m wrong he s max if i m right either one of those gets triggered. I m either going to lose money. I m going to make money and then that s it take all the little orders out and i ll look fresh all right let s dive into inter trader and let me sort them bring it up here for you and let s do one. As if we re just going to put an order in actually on a platform.
So we re trading us dollar jpy that s i know it s in the most popular markets us dollar jpy rolling that s exactly what we won so we re gonna hit a trade button okay fires up paying and we know from our ourselves our cousin goes short a market and we re gonna have our stop. What was it a hundred points of where i think we decided to have it a 11350 anyway so good thing about is that we can just kind of see in the way. I ve got my arrow here as we adjust the level in terms of points. Where it would be a less say let s put a tick above that 11350 level says i ll stop 76 points risk.
Very nice we re happy with that i ll limit now is we were gonna put it out 1 on 150 right so that will if we drive it down wrong way around drive. It up here. We go got some more ticks..
And that s exactly what a b. Let s put our color ticks above it so that s 125 points away stop 76 points. Away double check here to the high side. It s there great the low side.
It s there and also they re giving us. An inter trade they re giving us two different kind of scenarios. They don t know yet whether we re buying or selling and actually the reason they have that is because they don t want to they don t want to know if you re buying or selling it because there s a kind of old thing that the brokers would have to give you a two way. Quoting case they manipulate that quote so this kind of goes on where we run it to a technology to give you a two sided pricing.
This don t know what you want to do with that price. But that s the price so you can buy and sell out and then you decide whether to buy sell this example. We re going to hit sell so when i sell here we re gonna double check the quantity one let s say we want to do five pound a point where a spread bet platform. At the moment.
We re going to short a 12 112. 78. 79. Where we get filled out our stop is going to be our to justice a little bit.
But i m happy again to leave that just above that one 11350 level. So for sure that would be i ll still be went long by the way then i ll stop would obviously be below the market and would be 112. But as we re going to sure that s gonna be our stops. We checked the red side corresponding with the cell and also to our limits gonna be our take profits at that one 11 50.
Great seller. We re in so trade price filled five pound. A point one twelve seventy nine eight hour stop livers one thirteen and a half or fifty two and i ll limit level is one 11 54..
If we go back to our chart that will check what we had here pretty much what we ve got 11350 great what stop there so those are gonna cancel each other out if one of them gets filled then it s gonna automatically cancel the other one and basically trade just gets bracketed nicely we can forget about it we can look on to the next trade have to worry about when it s going to get filled and if it s gonna be a loose or just left around the market that couldn t make us netlogo next. Sure so that s a no order guys. Very useful to do now just a little tip is that hey you have to kind of always use that to get an ally betrayed. But if you ve got it there.
If you ve bracketed you trade you ve capture risk. Which always do anyway. You ve got a primary or a overall ultimate target. Should.
I say you can always adjust it and move it around and take profits early or stretch. It i ll stop you should probably always keep it in the same position. But you can adjust it but ease without bracket in place. If something comes out on the market.
So nice bugs in your direction. At least. You ve got a resting order there to capitalize on the opportunity grab the profit bank crystallized that gain and move on to the next. One alright guys good trading.
See the next one take care bye bye. ” ..
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