Limit Order
An order to buy or sell at a specific price or better.
Full Definition
A limit order sets the maximum price you are willing to pay for a buy or the minimum price you will accept for a sell. Buy limit orders are placed below the current market price; sell limit orders are placed above. The order only executes if the market reaches your specified price or better, guaranteeing no negative slippage. The trade-off is that the order may never fill if the price does not reach your level.
Limit orders are used for precision entries at specific technical levels or when waiting for pullbacks. A trader who wants to buy EUR/USD on a dip to support at 1.0820 can place a buy limit at that exact price and walk away. If the market drops to 1.0820, the order fills at 1.0820 exactly (barring liquidity issues), not a pip worse. This precision is valuable for strategies built around specific levels like Fibonacci retracements, round numbers, or prior swing highs and lows.
For example, if EUR/USD is trading at 1.0850 and you want to sell on a rally to resistance at 1.0900, place a sell limit at 1.0900. If the market climbs to 1.0900, your order fills at that price. If it only reaches 1.0890 before reversing, the order does not fill, and you missed the trade. With 1 standard lot, a fill at 1.0900 that then drops to 1.0850 produces a 50 pip profit (about $500), while a missed fill produces zero.
In copy trading, limit orders are used when the master strategy wants to enter at specific prices rather than at market. SteadyFlowFX's 9 algorithms use a mix of market and limit orders across the 8 currency pairs. When subscribers see pending orders in their account at specific price levels, they reflect the strategy's patience — waiting for the setup to come to a defined technical level rather than chasing the current price.