A limit order is an instruction to buy or sell a currency pair at a specific price or better. It executes only when the market reaches your specified price, unlike a market order that fills immediately at the current price. This gives you precise control over your entry and exit points.
How Limit Orders Work
Two main types exist:
- Buy limit order: You set it below the current market price. It executes when the market drops to your level.
- Sell limit order: You set it above the current market price. It executes when the market rises to your level.
Your limit order remains active until it fills or you cancel it.
Trade-Offs
Limit orders offer price precision but carry execution risk. If the market never reaches your price, your order won't fill—potentially costing you an opportunity. In fast-moving or illiquid markets, you may receive only a partial fill. Price gaps during volatile periods can bypass your order entirely, leaving you unable to trade at your target price.
