Buy limit and sell limit
A buy limit sits below the current price and waits for the market to come down to it. A sell limit sits above and waits for the market to come up. Both are orders to trade at a better price than the one available now, which is why they wait.
What it guarantees
The price, or better. It does not guarantee a fill: if the market never reaches your level, or touches it and moves away without enough volume, the order simply does not execute. That missed trade is the cost of controlling the price.
Where it fits
Strategies that wait for a pullback rather than chasing a move. A trader who wants to buy on a retracement to a level places a buy limit there and lets it work rather than watching the screen.
The trap
A limit order fills only when price comes to you, which means it fills most reliably when the market is going against the direction you wanted. Being filled on every pullback in a falling market is not a feature.
In short
| Buy limit | Placed below the current price |
|---|---|
| Sell limit | Placed above the current price |
| Guarantees | Price, or better |
| Does not guarantee | A fill |
Common questions
Why did my limit order not fill when price touched it?
Touching is not enough — there has to be someone on the other side at that level for your size. On a fast wick through a level, orders often do not fill.
Is a limit order better than a market order?
Neither is better. One controls price and risks missing; the other controls execution and risks slippage. Which is right depends on whether being in the trade or the entry price matters more.
Do limit orders expire?
That is up to you. Most platforms offer good-till-cancelled or an expiry date. A forgotten limit order that fills weeks later, into a market that has changed completely, is a real hazard.
Trading forex and CFDs on margin carries a high level of risk. Most retail accounts lose money. Nothing on this page is financial advice or a recommendation to trade.