I’ve been trading for a few months, but the different order types are still throwing me off.
When you place a buy limit order, what exactly happens? How does it differ from just going for a market price?
Buy limit orders let you set a price below current market value. You only get filled when the price hits your target, while market orders fill instantly.
Buy limits are often confusing for new traders. You place them below the current price, which allows you to set your desired entry point. The main advantage is you control your purchase cost. Market orders risk slippage during volatile times, costing you more. For example, if you set a buy limit at 1.1020, you’ll get filled at that price or better. The downside is the price may not reach your limit, leading to missed opportunities. Overall, better entries typically make this strategy more effective than chasing price.
Buy limits let you set a price below current market value where you want to buy. Your order waits there until price drops to your level.
Say EUR/USD is at 1.1050 and you think it’ll dip to 1.1020 before bouncing up. Set a buy limit at 1.1020. If price hits that level, you’re filled automatically.
Market orders fill instantly at whatever’s available now. Limit orders only fill at your exact price or better.
I use buy limits when I spot support levels on charts. Way better than chasing price or getting crappy fills from market orders when things get volatile. Just make sure your limit price actually makes sense with how the market’s moving.
It’s like setting a trap for a better price. You tell your broker to only buy if the stock drops to your target.
The main benefit? Better entry points instead of buying at whatever’s available now. You might miss some moves if the price never hits your limit, but you won’t overpay when the market’s working against you.
Most traders use them when they expect a pullback before the real move starts.
Buy limit sits below current price and waits for fills.