A limit order lets you set the exact price at which you want to trade. The order only executes if the market reaches that price or a better one.
It’s a way to stay patient instead of reacting to fast moves. You decide the price in advance and let the market come to you.
Limit orders help control entry and exit prices, especially in volatile markets. They reduce the risk of overpaying or selling too cheaply during sudden moves.
They are particularly useful when liquidity is uneven and bid-ask spreads widen. Compared to market orders, limit orders offer more price control but less execution certainty.
Key elements of a limit order include:
- Limit price set by the investor
- Execution only if the market reaches that price
- Partial fills possible depending on liquidity
- Orders can expire or remain open until canceled
Not all limit orders get filled.
A common mistake is setting limit prices too aggressively. Orders that are far from the current price may never execute.
Another error is forgetting open orders during fast market moves. Limit orders can trigger unexpectedly when volatility spikes.
On Stoxcraft, limit orders are covered in Academy content explaining trading mechanics and execution basics.
They’re also referenced in comparisons between limit orders and market orders when discussing trading discipline and price control.
