Limit Order
Order Types & Execution
A limit order sets a specific price at which to buy or sell, executing only at that price or better, giving price control but no guarantee of a fill.
What is a limit order?
A limit order is an instruction to buy or sell an instrument only at a specific price you choose, or at a better price — never worse. Unlike a market order, which executes immediately regardless of price, a limit order waits until the market comes to you, which means it may fill instantly, fill later, or never fill at all.
How it works
When you place a limit order, you set a target price away from the current market price:
- A buy limit order sits below the current price, since you want to buy cheaper than today’s level.
- A sell limit order sits above the current price, since you want to sell higher than today’s level.
Because a limit order only becomes a live trade once the market reaches your chosen price, it is one type of pending order — an instruction that sits waiting rather than executing straight away.
Worked example
Suppose GBP/USD is trading at 1.2700 and you believe it’s a good buy if it dips to 1.2650. Instead of watching the chart all day, you place a buy-limit order at 1.2650. If price falls to that level, the order fills automatically at 1.2650 or better; if price never falls that far, the order simply stays pending (or expires, depending on its time-in-force setting).
Why it matters
Limit orders give traders precise control over entry and exit prices, which is useful for planning trades around specific support, resistance, or valuation levels rather than reacting to whatever price happens to be showing right now. The trade-off is that a limit order can miss a fast-moving market entirely if price never reaches the set level — something worth weighing against the certainty (but price risk) of a market order. See buy limit and sell limit for the two directional variants in detail.
Trading carries a high level of risk and may not be suitable for all investors.