What is a limit order?
In one line: An order to buy or sell only at a price you choose, or better. If the market never reaches your price, nothing happens.
A simple example
A stock trades at $50.40. You marked support near $50.00, so you place a limit buy at $50.00.
- If price drops to $50.00, your order can fill at $50.00 — or lower, if the market jumps past it.
- If price only dips to $50.10 and then rises, nothing fills. You simply don't get the trade.
A limit sell works the other way: it fills at your price or higher. Many traders use one as their take profit.
Why it matters
A limit order lets you plan the entry before price gets there. You pick the level from the chart, set your stop loss, work out the size with the position size calculator, and wait.
It also protects you from paying more than you planned. A market order takes whatever price is there right now, which can be worse in a fast market. That gap between the price you wanted and the price you got is called slippage.
The trade-off in one line: a market order promises a fill but not a price. A limit order promises a price but not a fill.
A common mistake
Chasing the order. Price comes close, misses by a few cents, and runs. So the trader cancels and moves the limit higher, then higher again. Now they're buying far from the level they planned — with a stop that no longer makes sense.
If the order didn't fill, the plan didn't happen. Let it go. Another setup will come.
A second mistake: forgetting an order is still open. A limit left sitting overnight can fill later, when you're not watching and the reason for the trade is gone.
For a side-by-side look, read market vs limit orders.
Questions
Can a limit order fill at a better price than I set?
Yes. A limit buy can fill below your price and a limit sell above it, if the market moves past your level quickly.
Why didn't my limit order fill when price touched my level?
Other orders at that price may have been ahead of yours in line. A touch doesn't always mean a fill — price often has to trade through your level.
Should beginners use limit or market orders?
Both have a job. Limits suit planned entries at a level. Markets suit getting out fast. Learn what each one does before you go live.
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