How to Place OCO Orders

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Video Transcript:

Hello, traders. Welcome to the NinjaTrader tutorial and the forth module, SuperDOM Interactive. In this lesson, we are going to learn about one cancels the other orders or OCO orders. OCO orders mean that when one of the two orders inside of the OCO bracket gets filled, the other gets cancelled. This is great technique to trade ranges, for example, and this will be our first example. Let’s imagine that prices is trading inside of this range, okay? And we want to sell the market at resistance and buy the market at support but, because price is trading in the middle now, we don’t know if we are going to sell the market at resistance or by the market at support. What we are going to do is we are going to use two orders that cancel each other. One sell order at resistance, and buy order at support.

OCO Order Ninjatrader

First of all, what we need to do is we need to activate the OCO. So, to activate the OCO, right-click on the superDOM and click on OCO order. You will see right here that the OCO is active now. So, what we are going to do is we are going to place a sell limit order above the market, right here of two contracts, and a buy limit order below the market right here at 50-17. Because the market is pretty thin buy now, we are going to go ahead and move the buy limit order to the actual market price. This is just for you to see that, when one of the two limit orders gets filled, the other gets cancelled.

Now the order got filled, and the sell limit order got cancelled, once we got long on this trade. I’m going to close this trade [inaudible 00:02:24] now. And I’m going to go to the second OCO example that I’m going to use the OCO function to bracket the current position. Now, let’s assume that we have an open position that is unprotected, with either stop loss or limit orders as profit targets. To protect this trade, we are going to use an OCO stop loss and profit taking or limit order. So, what we are going to do, first of all, we are going to place a stop loss below the current market price. By doing so, we are going to hold onto the control key and press this middle wheel of the mouse. The OCO is active, so we need a target and we are going to put on the target, right here, at 50-37 just by left clicking on the sell side of the SuperDOM.

We have a limit order and a stop order of two contracts. Now, if the limit order gets hit, it will mean that our trade is going to be taken out on a profit, and our surplus will be cancelled because the limit order got filled. Vise versa, if the stop loss gets filled, we are going to be taken out on a loss, and the limit order will be cancelled. OCO orders are great because, if you don’t use OCO orders while protecting a trade or while using a bracket with your limit order or your profit target gets hit and filled, your stop loss will remain active and market could come down and fill it. And you will be on an unprotected trade without a strategy or without a valid entry.

Now, I’m going to push down the limit of his trade, because we are already a few ticks, we are four ticks in the morning. So, I’m going to push it down, right here, and you can see we got filled, and the stop loss got cancelled. Always remember to click out the OCO order menu, because you don’t want to have duplicate OCO orders within your SuperDOM.

Adam

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