What is a stop limit order

While the most common order types on crypto exchanges are market orders and limit orders, they are not suitable for advanced traders with detailed trading strategies. One main reason for this is the fact that crypto markets are active 24/7, 365 days a year and require active strategies that cover multiple time zones.

This is why advanced order types, such as stop limit orders, especially with multiple conditions, are necessary to execute sophisticated trading strategies. An example of this is the OCO stop order type on OKX, which allows traders to set up to four different conditions that can yield different results depending on market movements.

For instance, if Bitcoin is trading at $11,200 right now, and a trader wants to sell it at $11,700 for a profit or $10,900 on the downside (limiting loss), they can use the OCO type and enter $11,700 as the take profit trigger price and $11,690 as the take profit order price (the $10 difference is to ensure that the order gets filled). At the same time, the trader can enter $10,900 as the stop loss trigger price and $10,890 as the stop loss order price.

Now, if the price of Bitcoin moves up toward the profit target and meets the threshold, the order will be executed and the other set of stop loss conditions will be canceled and vice versa.

This method is far more effective than manually setting limit orders at various levels, since they will not be canceled by each other and will not have trigger conditions like the OCO order example given above.

Ultimately, the stop order and its sub-orders are unique in how they allow traders to be very specific in setting up automated trading conditions in advance and have them executed in line with their trading strategies.