Limit orders

A limit order is an instruction to your broker to carry out a trade in the financial markets at a specified price that is more favourable than the current price. It is often used as an alternative to a market order in times of market instability or volatility, when a market order cannot guarantee you the optimal price on a trade. However, this is dependent on the asset reaching a specified price. If it doesn’t, it may lead to a missed trading opportunity.

Watch the video below to find out how to place market, limit and stop-entry orders on our award-winning* trading platform. You can place a limit order anywhere on the platform by clicking on the buy or sell price, whether this be from a watchlist, trading chart​ or even open positions that you already have.

A buy limit order can only be executed at or below the specified limit price. By using a buy limit order, you are guaranteed to pay the price that you specified or less. To set a buy limit order, simply open the trading chart for your chosen instrument and click on the blue ‘Buy’ button. Here, you are able to change the type of order, order duration and also add stop-loss​ and take-profit orders to your trades if needed.

One risk that comes with setting a buy limit order is that the filling of the position is dependant on the asset reaching the desired price that you enter. If the asset does not lower to the price that you specify before the date and time of expiry, then the trade will not be executed and you could miss out on potential success.

A sell limit order can only be executed at or above the specified limit price. By using a sell limit order, you are guaranteed to receive the price that you specified or more. However, in the same way as a buy limit order, this all depends on whether the price rises to your specified amount. If it does not reach the desired price, then the trade will not be executed. To set a sell limit order, follow the same steps as above using the orange ‘Sell’ button.

When you set limit orders on our platform, you can choose the order duration, which falls under two categories:

A stop-entry order is similar to a limit order in that it allows you to enter a transaction at a selected target price. A stop-entry order to buy is an order at a price above the prevailing market price, and a stop-entry order to sell is an order at a price below the prevailing market price.

However, stop-entry orders are mainly used when market value appears to be declining, and these can only be executed when the price becomes less favourable for your chosen asset. This is primarily to capture momentum at the start of a new trend. As always, there is the risk of executing a trade outside of your price specifications, which be managed using our advanced platform features.

The main difference between a market order​ and a limit order is the specification of price. A market order is an order to buy or sell a security immediately at any given price, whereas a limit order specifies the minimum and maximum prices that a trader is willing to buy or sell an asset for.

Therefore, limit orders aim to secure the position around your budget, while a market order is more focused on opening a position as quickly as possible.

The main difference between a stop order and a limit order is the guarantee that the order will be filled at the exact price specified. Whereas limit orders always aim to fill at the best available price, stop orders can be affected by market conditions such as gapping or slippage on a price chart between trading days. This can result in losses if trades are executed at a different price to the stop price.

In order to avoid executing trades at an unexpectedly lower or higher price, there is also the option to choose a guaranteed stop-loss​. This works in the same way, except that for a premium fee, it guarantees to close the position at the exact price specified, regardless of market volatility or gapping.

Our Next Generation trading platform​ contains boundary trading tools that help to control slippage in volatile markets by specifying a price range in the order ticket. If the price at execution is outside the specified range, then the order will be rejected. Boundary orders are available for all market and stop-entry orders, so learn more by watching the video below.