Limit Order

A limit order is a type of trading order that allows an investor to buy or sell a cryptocurrency at a specific price or better. For example, if you want to buy Bitcoin but only if the price drops to $30,000, you would place a buy limit order at that price. If the market reaches $30,000 or lower, your order will be executed. Conversely, if you want to sell Bitcoin only if the price rises to $40,000, you would place a sell limit order at that price, and it will execute if the market reaches $40,000 or higher.

Limit orders provide traders with greater control over the price at which they buy or sell, making them particularly useful in volatile markets where prices can change rapidly. By setting a limit order, traders can avoid the uncertainty of market orders, which execute at the current market price, potentially leading to less favorable outcomes. However, the trade-off is that limit orders are not guaranteed to execute if the market does not reach the specified price. This means that while you might protect yourself from buying or selling at an unfavorable price, you also risk missing out on a trade if the market moves in a different direction.