A limit order is a type of trading order that enables traders to define a particular price at which they are willing to buy or sell an asset.
For buying, a limit buy order is set below the current market price, while for selling, a limit sell order is set above the current market price. The execution of the trade will only occur if the market price reaches or surpasses the specified limit price.
For example, if you wanted to sell a stock for $100, you could place a sell limit order with a price limit of $100. Conversely, if you want to buy at $80, you can place a buy limit order with a limit price of $80. Once the market price reaches your limit price, the buy/sell order will be executed.
Steps for Using a Limit Order:
Step 1: Choose whether you want “Buy limit or Sell limit”.
Step 2: Click “Limit” as your order type.
Step 3: Enter the “Amount” you wish to purchase.
Step 4: Enter the “Price” at which you wish your order to be executed.
Step 5: Click the “Place Buy Order Button” and your order will be executed once the market price reaches that price.