An order to buy or sell an asset at a specified price or better.
A Limit Order is an instruction to buy or sell an asset at a specific price or better. Unlike a market order, which executes immediately at current prices, a limit order executes only when the market reaches the defined price level.
Limit orders give traders precise control over entry and exit points.
How Limit Orders Work
Buy limit order: Executes at the limit price or below
Sell limit order: Executes at the limit price or above
If the market never reaches the limit price, the order remains open or eventually expires.
Advantages of Limit Orders
Control over execution price
Protection against sudden volatility
Useful for scaling strategies and automated entries
Avoids slippage in thin order books
Limit vs. Market Orders
Limit Order: Price control, slower execution
Market Order: Fast execution, less price control
Traders often combine both order types depending on their strategy.
Summary
A limit order lets traders specify an exact price at which they are willing to buy or sell, offering precision and protection in fast-moving markets.
