Limit Order
Limit Order
Understanding Limit Order
When getting active in online trading, the term 'Limit Order' comes up quite frequently. A Limit Order is a specific type of order used by traders to buy or sell a specific amount of an asset at a set price (the limit price) or better. If the conditions aren't met, it won't execute. In other words, a Limit Order allows traders to lock in the price they want.
Type of Limit Orders
There are two kinds of Limit Orders:Buy Limit Orders and Sell Limit Orders.
'Buy' Limit Order
A 'Buy' Limit Order is to buy at a price equal to or less than the set limit. For instance, if a trader sets a Limit Order to buy a stock at $10, they get the stock only if the price drops to that level or lower. This strategy enables traders to buy an asset at a lower price.
'Sell' Limit Order
A 'Sell' Limit Order is to sell an asset when its price is equal to or more than the set limit. If the trader sets a sell Limit Order at $20, the order will only execute when the market price rises to that level or higher. This strategy enables traders to sell an asset at a higher price.
Advantages of Limit Order
The primary allure behind using a Limit Order is the predictability it provides in terms of price. With Limit Orders, traders can manage how much they're willing to pay or receive for an asset, eliminating potential losses due to market fluctuations. However, while the price is guaranteed, its execution isn't since the market may never reach the set limit price.
Limit Order and Market Volatility
Limit Orders offer a crucial defense mechanism against market volatility. When prices are fluctuating quickly, Limit Orders can ensure that traders don’t end up paying significantly more or receiving significantly less than they anticipated. It’s an essential tool for trading, especially during times of high market volatility.
Blog Posts with the term: Limit Order
Gemini, a cryptocurrency exchange founded by the Winklevoss twins in 2014, has rapidly become a go-to platform for digital asset...
Bitfinex stands as one of the most advanced trading platforms in the cryptocurrency space, offering users...
If you're new to the world of cryptocurrency trading, you may have come across the name KuCoin. This platform is...
At the heart of the digital currency revolution, 21bitcoin stands out as a powerful platform designed to open the doors...
Cripto Intercambio, or cryptocurrency exchange, is a digital marketplace where traders can buy and sell cryptocurrencies using different currencies. It...
Welcome to the dynamic world of cryptocurrency trading with Bitget. If you are looking to dive into the fast-paced environment...
Bitcoin Trading Explained: Cryptocurrency, notably Bitcoin, has rewritten the reality of financial transactions globally. This ascent has spurred interest in...
The digital age has spawned a new kind of gold rush, one that's not happening in the Wild West but...
Embarking on the digital currency voyage, BTCC has emerged as one of the trailblazers within the crypto exchange realm. Since...
dYdX is a decentralized exchange, often referred to as a DEX, that allows users to trade...
Imagine a way to invest in a variety of financial instruments without the need to scrutinize each individual asset. Then...
BuyUcoin is a leading cryptocurrency exchange based in India that provides users with a platform to buy, sell, and trade...
Embarking on the trading path requires a reliable companion that can furnish you with the necessary tools and insights to...
In the world of trading, knowledge is power. One of the most fundamental aspects that traders need to understand to...
XGo is a comprehensive crypto trading platform designed to facilitate the buying, selling, and trading of various cryptocurrencies. It offers...