I've recently been looking into placing conditional orders and came across these two types of conditional orders:
- OCO (One-Cancels-the-Other)
- OTOCO (One-Triggers-a-One-Cancels-the-Other) (also known as a bracketed buy order?)
I looks like the OCO part of both orders is mostly used to set a "Bracket", basically an upper and lower limit on sell orders at the same time.
I understand the lower limit, since you want to sell at a certain point to limit your losses.
But I don't understand why people set a sell limit on the higher side. Wouldn't you want to maximize profits as long as the stock is going up? And a trailing stop loss / limit order would help reduce losses on a stock that's going up but may trend down later?