[ Order type · Price control ]
Limit Order
Name your price. Only fill if the market comes to you.
[ Definition ]
What it is
A limit order is an instruction to buy below the current market price or sell above it. The order sits in the book until the market reaches your price, and it will only ever fill at that price or better. If the market never reaches your level, nothing is forced on you — the trade simply never happens.
A limit order flips the power dynamic. Instead of chasing the market, you set the price you are willing to trade at and wait for the market to come to you.
[ In one sentence ]
Reach for it when the price matters more than whether you get filled at all.
[ What matters most ]
Your price, or nothing
A limit can never fill worse than your level, so the risk you set at the start is the risk you carry — the number on your plan stays the number on the trade.
The cost is the move you miss
There is no penalty for an order that never fills — the price is merely one you did not pay. Decide up front that you can live without the trade; that is what lets the level stand instead of being chased.
Waiting has to be worth it
You are trading time for a better price, so pick a level that earns the wait — one the market actually has to travel to, not a hair's breadth from where price already sits.
[ Mechanics ]
How it works
A buy limit is entered below the current ask and fills when the ask drops to your price. A sell limit is entered above the current bid and fills when the bid rises to your price.
Because you are providing liquidity instead of taking it, many brokers let you trade with a smaller or even zero spread markup — you often get a better effective price than a market order would have given.
A limit the price turns away from does not chase the market — it simply rests in the book, untouched, until the market returns to your level or the order expires.
The card below runs steps 01–03 on a single trade, start to finish.The card alongside runs steps 01–03 on a single trade, start to finish.
EUR/USD is trading at 1.08500 and you only want to buy if it dips to your target level.
The cost here is invisible — nothing is lost while you wait, but you are also not in the trade. Patience is the price of a perfect entry.
[ On the chart ]
Where the limit order fills
See the exact point on the price path where a limit order fills — then switch tabs to compare it with the other three.
The gap sits late on the path, so it only changes orders that trigger after it — open a stop order to see the difference.
Two limits rest — one above, one below.
Buy limit
1.08178
Sell limit
1.08960
Slippage
0 pips
Main risk
No fill
Waits for the market to reach your price
You rest a buy limit below the market and a sell limit above it. Nothing fills until price travels to your level — and it can never fill you worse than your price.
[ Trade-offs ]
The upside and the risk
Where it shines
- You name the price and never chase — the market has to come to you
- Your risk maths holds: a fill can never be worse than the level you chose
- The same order doubles as a take-profit, banking winners while you are away
What to watch
- A level the market never reaches earns you nothing — no fill, no position, and the move you read correctly plays out with you on the sidelines
- The better price is bought with time — the level only fills when the market returns to it, and every session spent waiting is one you were flat
- A resting limit fires the instant price arrives — including when it arrives in a news spike
[ Where to trade a limit order ]
When you are ready to place one on a live account
This order type behaves the same at every broker — pricing and platforms differ.
Partner links — this site may earn a commission at no extra cost to you. It never changes what we write.
[ Common misuses ]
Where beginners go wrong
The limit order is not the problem on its own — how it gets used is. These are the habits that trip up new traders, and what to do instead.
Placing a limit and assuming it will fill
A limit sits until the market comes to you. If price turns just before your level, the move happens without you — and it is easy to confuse 'no fill' with 'no harm'.
Price dipped to 1.08205 — barely half a pip above a 1.08200 limit — then reversed 80 pips. The level was right; the order simply never filled.
Set an alert at your level and have a plan for when price reacts without you in the trade.
Leaving resting limits open through news
A resting limit does not care why price arrives — it fires the instant the market trades through it. Around a release, that is exactly when a fast, one-way move is already underway, so you can be filled simply because price is steamrolling past your level.
A buy limit parked 30 pips below the market during a CPI print filled as price crashed straight through it — then kept falling another 60 pips before it paused, leaving the position deep in the red.
Cancel stale limits before scheduled releases and re-place them once the market settles.
Capping a winner with a target set too tight
A take-profit placed too close to entry banks a small gain and exits right before the real move. The trade was right; the target was emotional, not structural.
You bank +20 pips at your take-profit — then the pair runs another +120 without you. The target captured a seventh of the move the setup implied.
Base the target on structure or a measured move, not on how much profit feels comfortable.
[ In practice ]
When to use a limit order
These three are the situations where a limit order does exactly what you need — reach for it whenever one of them sounds like the trade in front of you.
You have a defined support or resistance level
You want to buy a dip or sell a rally at a specific price
You want to bank a winner automatically while you are away from the screen
[ The other side ]
When not to use a limit order
The mirror image: these are the situations where the limit order is the wrong tool — reaching for a different order is the better call.
Missing the move is the bigger risk — if a pullback never comes, you are left watching the trade run without you
You are chasing a breakout — price leaves the level and does not look back, so the order simply never fills
You need to be out by a fixed time — before an event or at the close — where a fill that may not arrive is worse than a slightly worse price
[ FAQ ]
Questions, answered
The questions traders ask most about the limit order — answered plainly.
Browse the full glossaryA market order fills now at the best available price; a limit order only fills at your chosen price or better, and may never fill at all. One buys you certainty of execution, the other certainty of price.
[ Keep going ]
The other order types
[ Next step ]
Your price is safe. The fill is not.
A limit can never fill worse than your level, so the whole risk moves to whether it fills at all. See what a thin book and a fast move do to an order resting in it.