Trading 101 - Order types: Limit Orders
In trading, a limit order is an order to buy or sell an asset at a specified (or better) price.
Buy-limit: Buy Order will be executed only at the chosen limit price or lower.
Sell-limit: Sell Order will be executed only at the chosen limit price or higher.
Pros: Buy/sell at chosen price or better.
Cons: Can take time to fulfill or even never be, due to market conditions.
Example:
The current price ABC/USD is $9,540.1
You want to buy ABC and believe its price will go down in a near future. You place a buy-limit order at $9,003.4 for 5 ABC. Your order appears now in your open order book (pending, will execute when the price condition of $9,000 is reached).
Three hours later, ABC price quickly falls down below $9,003.4 and your order execute at $9,002.9 per ABC, in average.
Using a limit order results into paying maker fees to the broker/exchange (as it is not matched immediately).
TradingBull.io
Telegram community: https://t.me/TradingBull_DA
Twitter: @_Digital_Assets
