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The term bracket order in my book is when you have a stop loss order and exit target set in you platform order management settings to be entered automatically when you place the entry order. The entry and exit order are "brackets" above and below your entry order.
An OCO order can be placed after a trade is already on and you want to add a stop loss and target for the whole of that trade, or part of the position, so that when one side of the order is filled the other opposing order is automatically cancelled.
They are in effect the same thing, just placed in the market differently.
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
And I have seen other traders who's platform also offers both and they will sometimes opt for OCO and other times a bracket order and it didn't seem to be clear why they were choosing one over another.
I understand why they would opt for a market order.
to make it clear, you just have to read the full name: Order Cancels Order or One Cancels Other (with other words, as soon one part is filled, the other part of the order will be canceled
You also can use an OCO as break-out order i.e. you can enter a Buy-Stop and a Sell-Stop order 1 tick above and 1 tick below the first 5min candle, if one part is filled, the other part of the order will be canceled
Order Cancels Order is what I found confusing because isn't that what the bracket order does?
I think by stating that was making me question whether "bracket" order didn't already function the same way and whether I was missing something about the bracket order.
That's really smart what you were saying about the buy stop and sell stop.
I have been trading forex and I am new to futures. Would I have needed to open a hedge account with my broker in order to create that type of order with futures also?
To be honest at this stage I am just trying to get comfortable as it is much faster than forex.
" ... isn't that what the bracket order does? "
YES.
As stated in the answers above OCO is a feature than can be applied to different types of orders for different purposes.
I would re-write this question more simply, "Would I need to open a brokerage "futures" account to create that type of order with futures also?
The answer is "Generally yes, but larger brokers like Interactive Brokers, TDAmeritrade, etc might help customers with accounts that can trade a larger offering of instruments."
My better answer is ... There might be a faster, simpler path to get to the final conclusions you seek.
I recommend:
1) Pick a market and instruments you want to trade
2) Google around and ask here for the most popular broker / clearing house (FCM) combinations for that targeted market
3) Look on those brokers websites to see which orders are supported for the desired FCMs.
Move to next steps in your learning, planning and setup process
An OCO is a contingency type of order, contingent on the first part of the order to get filled before the second part gets cancelled. The other bracket orders mentioned are not contingent on anything. You can use all kinds of bracket orders to either enter or exit the market. To play breakouts you can bracket market consolidation with buy stop and sell stop or if you want to pick tops and bottoms you can bracket market with limit orders. To exit trades you can bracket with limit and a stop, etc
