CRYPTO GUIDANCE INC.

Kansas City, MO

What Is a Limit Order?

A limit order is an instruction to buy or sell at your named price or better, and otherwise to wait. It is the patient order type: you set the terms, the market decides whether to meet them.

How It Actually Works

Your order joins the order book at your price. A buy limit at $60,000 fills only if the market comes down to $60,000. A sell limit at $70,000 fills only if it climbs there. Until then it rests, cancellable any time. Because resting orders provide liquidity, exchanges usually charge them lower "maker" fees than market orders pay.

Strengths

Price certainty. You never pay more or receive less than you named. On thin markets this is the only sane way to trade, because it makes slippage impossible.
Discipline by structure. Deciding prices in advance beats deciding them mid-panic.
Lower fees on most venues.

Risks and Common Mistakes

No guarantee of a fill. The market can run without you, and partial fills happen when only some size trades at your level.
Anchoring to round numbers. Everyone clusters at $60,000 even; fills can skip past crowded levels by pennies.
Leaving stale orders standing. A forgotten limit from last month can fill during a flash move you never saw.

When It Matters

Almost always, for a patient investor. Accumulating on a schedule, taking profits at planned levels, entering thin markets. The companion tool is a plan: my Portfolio page covers deciding levels before emotion does.