Skip to main content

What is a Limit Order?

it perpvia
Updated

Limit order is an instruction to buy or sell cryptocurrency at a specific price or better. Unlike market orders, limit orders are not executed immediately. Instead, they are added to the order book as pending orders, waiting for the market to reach the price you set. Limit orders are very effective for traders who want to buy at a lower price or sell at a higher price without constantly monitoring the market.

1. How to use it in the order book?

  • When you place a buy limit order, it is added to the green area of the order book, pending at the price you choose. The order will only be executed when there is a matching sell order at that price or lower.
  • When you place a sell limit order, it is added to the red area of the order book, pending at the price you specify. The order will only be executed when there is a matching buy order at that price or higher.

9607ce99ea85e13cbaf84cdde3f2f13f.png

2. Key Features:

  • Price Control: You set the exact price you want to trade at, ensuring that you won’t incur unexpected costs due to price fluctuations.
  • Execution Conditions: The trade will only be executed if the market price matches the set price. If the market price does not reach the set price, the order will remain unfilled.

3. Example of using the order book:

The order book shows the following buy orders for BTC/USDT:

  • $89,950: 0.4 BTC
  • $89,900: 0.6 BTC
  • $89,850: 0.8 BTC

You place a sell limit order for 1 BTC at $90,000.

  • Your order will be added to the red area of the order book until a buyer is willing to purchase at $90,000.

Disclaimer and Risk Warning

All trading tutorials provided by PerpVia are for educational purposes only and should not be considered financial advice. The strategies and examples shared are for reference only and may not reflect actual market conditions. Cryptocurrency trading involves significant risks, including the potential loss of funds. Past performance does not guarantee future results. Please ensure you conduct thorough research and understand the risks involved. PerpVia is not responsible for any trading decisions made by users.