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If Done Order

An ´If Done´ Order is a two-legged order in which the execution of the second leg can occur only after the conditions of the first leg have been satisfied. The first leg, only a Limit, is created in an active state and the second, which can be a Stop, a Limit, or an OCO, is created in a dormant state. When the desired price is reached for the first leg, it is executed and the second leg is then activated. Let´s look at one example of how an If Done Order could be used in trading the GBP/USD, as demonstrated below.

In the late night, GBP/USD is trading at 1.8556/60. You believe that 1.8565 is a very strong resistance level, which will not be easily broken. Furthermore, you also believe that when the 1.8565 level is first tested, there is a good chance GBP/USD will retrace at least 35 pips to approximately 1.8530, and you also believe that if 1.86 breaks, GBP/USD could go much higher and you don´t want to loose more than 35 pips on this position. The problem is, you do not know when this movement will occur. If you were able to watch the market 24 hours a day, then you might catch such a movement. However, now, you don´t have to watch the screen because you can leave an order to Sell GBP/USD at 1.8565, and if done then to Buy back GBP/USD at 1.8530 Limit Order or 1.86 Stop Order on OCO Basis, specifically in that sequence.

An if done order will only become active when the order to which it is attached is executed.

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