A limit order is a trading instruction that is only executed at a specified price or better.
In a buy limit order, the purchase is executed only if the market reaches the limit price or a lower price. In a sell limit order, the order is executed only at the limit price or higher.
Unlike a market order, where fast execution is the priority, a limit order prioritizes the desired price. However, this also means that the order may not be executed if the market never reaches the specified level.
Limit orders are particularly useful for traders who want to wait for a specific price level before entering a position, or who base their entries on technical levels such as support or resistance zones. They are an essential tool in active order management.
