A limit order is a type of order on a cryptocurrency exchange that allows a trader to specify the price at which they want to buy or sell a cryptocurrency. When you place a limit order, you are indicating that you want to buy or sell a certain amount of a cryptocurrency, but only at a specific price or better.
A limit order is added to the exchange’s order book, where it can be matched with another trader’s order. If a matching order is found, the trade is executed, and the limit order is filled. If a matching order is not found, the limit order remains in the order book until it is either filled or cancelled.
Limit orders are useful for traders who want to control the price at which they enter or exit a position. By placing a limit order, you can specify the maximum price you are willing to pay for a cryptocurrency, or the minimum price you are willing to sell it for. This allows you to potentially execute a trade at a more favorable price than if you used a market order.
Limit orders are typically charged lower fees than market orders, as they provide liquidity to the exchange’s order book and help to ensure that trades can be executed smoothly.
In summary, a limit order is a type of order on a cryptocurrency exchange that allows a trader to specify the price at which they want to buy or sell a cryptocurrency. Limit orders are added to the exchange’s order book and are executed when a matching order is found. Limit orders are useful for traders who want to control the price at which they enter or exit a position, and are typically charged lower fees than market orders.
Rabi is the founder of Cryptoetf.in and a regular contributor. He is passionate about the crypto world and keeps up-to-date with the latest developments, always eager to share his knowledge with readers.