OCO order : (One Cancles the Other)
The OCO order is a kind of orders regarding to combination. This is the abbreviation of "if One done, Cancel the Other". As you can see this abbreviation, OCO means the auto-cancellation if one order should be filled earlier where a set order of limit order and stop loss order is placed. Here, you need take care of If done order which is quite different from the OCO order.
How to use the OCO order
Your position needs to close to fix the profit or loss even when you are asleep. There might be some chance to take profit or needs to cut position to avoid unexpected losses. It is basic rule to place the single orders, one is the limit order for taking profit and the other is the stop loss order for loss cutting, but it is probable that both of two orders should be executed and it would arise the unexpected position to you. It is most dangerous in case that the point of taking profit are much close to that of loss cutting. Then, the OCO order is very useful and safe, which never to fill both of orders.