I'm not looking to enter the market on a market order but a stop order.... oco order. For example if oil is at 110 I want to sell at 108 and place a oco order to get stop out at 108.25. I'm waiting for that correction and trying to get the market to drop right through my entry point with minimal risk
its still the worst thing you can do. the irony here is by trying to reduce your losses to a minimum, all youre going to get are small losses. 50+ cents noise on oil is nothing and normal.
IMHO it depends a bit on how long you plan on being in the market. If you plan on day trading then using ATR (Average True Range) of a 9-14 day period would give you a good idea of a stop point. If you plan on being in for a few days to a week or so then you are a swing trader and a good place for a stop would be just below the previous swing low (if going long) or just above the previous swing high (if you are shorting). Please keep in mind that after looking at what using the ATR or the last swing position would mean for a stop, if you don't feel like you can handle that much risk then as others have said you might try to find a different instrument.
Oh and one more quick thing. Several times you mention using a OCO to enter your trade. I think you have your terminology wrong. OCO is "One Cancels Other". This means you are saying EITHER Fill the First order OR the second order but never both. You are wanting a OTO "One Triggers Other" meaning IF Order #1 is filled THEN place the stop order (#2). The broker I use allows a OTOCO order. Which is One Triggers One Cancels Other. This allows me to place an Entry order and if and only if that is filled then it puts in a OCO order with both stop loss and target profit exit points. This is handy for the times I don't plan on watching the trade too closely.