Market orders vs limit orders vs OCO orders

Before holding a position, many traders plan their take-profit and stop-loss strategies.
Setting a stop-loss as soon as you take a position is a fundamental principle for traders.

Stop-loss is the lifeline that protects the margin used to open a position.
However, some traders deliberately choose not to set a stop-loss.

Market Order

Traders who continuously engage in “streaming trades” capture the moving prices with buys and sells, and after a few minutes switch to opposite trades upon seeing a different trend.
In very rapid scalping, profits are taken with market orders.
If you keep setting stop-losses every time, you may miss the timing for taking profits.

Limit Order

A limit order specifies the trading price against a market order.
The order does not execute immediately; it becomes a trade when the exchange rate reaches the specified price.
Because you can determine the trade price based on your own forecast,
it has the advantage of making it easier to estimate profit and loss.

OCO Order

OCO (One Cancels the Other) orders allow you to plan both a take-profit and a stop-loss level immediately after entry,
and are an advanced form of limit orders.
For example, you can place two orders at the same time: buy USD at 100.50, take profit at 101.00, and stop loss at 99.50.

In this OCO order, when one side is filled, the other is automatically canceled, so there is no worry.

Many people find stop-loss psychologically difficult,
and traders may hesitate to use stop-loss with market orders.
In such cases, an OCO order that processes mechanically is convenient.

Available Order Features

The traditional limit orders for take-profit used in stock trading,
and the stop-loss orders called stop-limit orders, are also standard features offered by FX brokers.

Traders familiar with stock trading can also use these features.

Summary

• Market Order: Suited for trades that exploit volatile price movements,
  and suitable for rapid scalping.
• Limit Order: Since you can specify the trade price based on your forecast,
  it makes it easier to estimate profit and loss.
• OCO Order: Allows you to set both take-profit and stop-loss simultaneously,
  and cancels the other side when one is filled, reducing psychological burden.
  
  

Each order method has its own advantages, but
it is important to choose the most suitable method according to your trading style and psychological tendencies.

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