#SECGuidance

What is the Stop Loss strategy using OCO on Binance

If you are a beginner in the trading world, it is essential to learn how to protect your capital from significant losses.

One of the best tools for this is the OCO feature, or what is known as One Cancels the Other.

It simply means that if one of the orders is executed, the other is automatically canceled.

How does the OCO feature work?

When you use OCO on Binance, you place two orders together:

1 A sell order at a specified higher price to secure a profit if the price rises.

2 A stop loss order to protect yourself from loss if the price drops.

Once one of the orders is executed, the other is immediately canceled.

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A practical example for beginners

Suppose you bought a coin for $10 and expect it to rise, but at the same time, you want to protect yourself from loss.

You place an OCO as follows:

• Take Profit price $12, for example, you sell and take your profits.

• Stop Loss $9.5 to protect your capital.

• Stop Limit Trigger price $9.6, meaning if the price reaches $9.6, the stop is activated.

Thus,

• If the price rises to $12, you sell and take profit.

• If the price drops to $9.6, the sell order at $9.5 is activated to protect you from loss.

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Steps to use OCO on Binance:

1 Go to the trading page and select the pair you want to trade.

2 Click on the Sell option.

3 Choose OCO from the order types.

4 Fill in the details.