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 market. SteadyFlowFX's 9 algorithms use a mix of order types including limits for planned entries at levels of interest. The verified Myfxbook 71.3 percent win rate includes trades that fill at limit prices. Understanding limit orders helps subscribers read their trade history and verify that pending orders mirror the master's positioning, even when some limits do not fill due to price action.