Limit Order/Limit Buy/Limit Sell
A limit order, also known as a “limit buy” or “limit sell”, is an order placed by investors in the cryptocurrency markets to purchase or sell a specific amount of coins at a predetermined price. Limit orders are used when traders want to ensure that they get the best possible price for their trades.
For example, if you place a limit buy order with your broker for $100 worth of Ethereum (ETH), then your broker will only execute this trade if ETH can be bought at $100 or less per coin. If the current market price of ETH is lower than $100 then your order will be executed immediately and you will receive the lower market rate. However, if prices suddenly rise above $100 before your order gets filled, then it won’t go through since there won’t be any seller willing to let go of their coins at such low rates.
Similarly, placing a limit sell order means that you agree to sell your assets only if someone else agrees to pay more than what was initially agreed upon between both parties – i.e., higher than the predetermined rate given in the limit order. This ensures that even though prices may fluctuate during trading sessions due to external factors like news announcements etc., buyers and sellers have some sort of guaranteed protection from being taken advantage off by sudden changes in prices across exchanges due to high volatility within digital currency markets .
In conclusion , using limit orders helps traders stay informed about market trends while protecting them from getting taken advantage off during periods where prices increase rapidly without warning . It also gives them control over how much they are willing to spend on purchases and receive on sales ensuring fair transactions always occur regardless of outside situations which could potentially cause drastic swings in pricing across trading platforms .
