What is the meaning of a limit order when trading cryptocurrencies?

1 answers

• Antonio BaldasciniMar 11, 2023 · 3 years ago
  A limit order is an instruction given to a cryptocurrency exchange to buy or sell a specific amount of a cryptocurrency at a specified price or better. It is called a 'limit' order because it sets a limit on the price at which the order can be executed. For example, if you want to buy 1 Bitcoin at a maximum price of $10,000, you can place a limit order with a limit price of $10,000. If the market price reaches or goes below $10,000, the order will be executed. However, if the market price remains above $10,000, the order will not be filled. This allows you to control the price at which you enter or exit a trade, and it can be useful for managing risk and avoiding unexpected price fluctuations. Keep in mind that there is no guarantee that a limit order will be filled, as it depends on market conditions and liquidity. It's always important to monitor the market and adjust your orders accordingly.
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