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What is a limit order? Find out in detail Buy limit, What is Sell limit?

Limit order

You are new to trading forex, trade coin on exchanges? But You don't know what a limit order is? What is buy limit? What is sell limit? If so, then check out this article right away!

All your queries will be solved! Come with Blogtienao to see this article!

What is a limit order?

A limit order is an order the user places to buy or sell at a desired price. Usually buying at a lower price or selling at a higher price than the current price.

What is buy limit?

Buy limit is a limit order when you are in a buy position. It is easier to understand that you are looking to buy an asset at a price lower than the current price.

In technical analysis, people will buy at a strong support area because usually when the price touches this area it tends to bounce back.

For example: The current gold price is at $1700. But you feel that the current price is too high and think when gold reaches $ 1600 the price will go up again.

Moreover, you have identified this as a strong support zone. Now you just need to place a buy limit order with a price of $ 1600 and you're done.

What is support and resistance?

Buy limit

What is sell limit?

Sell ​​limit is a limit order when you are in a short position. It means that you are trying to sell an asset at a higher price than it was purchased. According to technical analysis, users often buy at a strong resistance area because then the price tends to decrease when touching this area.

For example: You bought gold at a price of $1700. You want to sell gold at $1800 or have identified this price as a resistance area.

At this point, you just need to place a sell limit order at the price of $ 1800. All that remains is to sit and shake the thighs and execute orders.

Sell ​​limit

Advantages and disadvantages of limit orders

Advantages

  • Suitable for those who have many jobs and do not have time to monitor the market
  • Get a better price than the current market price
  • Simple, easy to operate

Disadvantages

May miss the opportunity to buy or sell

The price didn't fall to your desired price but went up while you had a buy limit waiting there. Or you have set a Sell limit at a higher price but the price doesn't go up for you to be able to execute the order.

Losing when the price drops without stopping

Even though you bought a low price, if the price drops without stopping, you can still lose money.

Example of limit order in daily life

If you are still confused with what I said earlier. Well, let's see this real life example that you often come across for easy visualization!

Buy limit order

You have 2 billion in hand. You are considering buying a piece of land. This land is sold by the seller for the amount of money you have 2 billion.

But now you do not need to buy urgently and want to save some money for other things, so you only spend 1 billion 8 to buy land.

When you can bid with the seller or just wait for the land to drop in price and then buy. Buy limit orders also work in a similar way. The above example is a buy limit order for land of 1 billion 8.

Sell ​​limit order

You were given a piece of land by your mother in Ben Tre. Because you have no need to live or do anything else, you want to sell this land for 1 billion.

And you don't need money urgently, so those who ask to buy it for 800 or 900 million won't sell. Exactly 1 billion then you will sell.

Do you see any similarities? This is a sell limit order for your mother's land for 1 billion.

Conclusion

Hopefully, through this article, everyone has better understand about limit orders as well as what is a buy limit order or what is a sell limit order!

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Wished everyone success!

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Pham Quoc Dathttps://phamquocdat.net
I'm just a simple man trying to make my way in the crypto space.
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