Limit order
A limit order is an instruction to buy or sell only at a specified price or better, never worse.
It prioritises price over execution: a buy limit fills at its price or below, a sell limit at its price or above. The protection is absolute on price and conditional on filling — if the market never reaches the limit, the order does not execute.
This page covers the mechanic; it is not trading advice.
Price guaranteed, execution not
A limit order is the mirror image of a Market order. Where a market order guarantees execution and accepts any price, a limit order guarantees the price and accepts that it may not fill. A buy limit on EUR/USD at 1.0820 fills only if the market trades at 1.0820 or below; it will never fill at 1.0821. A sell limit at 1.0880 fills only at 1.0880 or above.
The benefit is the removal of downside Slippage. A limit order cannot fill at a worse price than its level, so the fast-market gap that costs a market order several pips simply does not apply. The cost is the non-fill risk: if price approaches the limit, reverses one pip short, and runs away, the order sits unfilled and the move is missed. The trader has chosen price certainty over the certainty of being in the trade.
A frequent error is placing a buy limit above the current price or a sell limit below it, expecting an immediate fill. A buy limit above the market would fill instantly at the current price, which is already better than the limit, so platforms either fill it at once or reject it — a limit only makes sense set at a price better than the current one. The limit is a patience instruction: it waits for the market to come to a chosen level, it does not chase the market to a worse one.
How a limit order behaves, and how long it lasts
A worked sequence on EUR/USD. The market trades at 1.0840. A trader places a buy limit at 1.0820, twenty pips below, intending to enter on a pullback. If price trades down through 1.0820 the order fills at 1.0820 or better. If price falls only to 1.0823 and then rallies, the order never fills and the trader stays flat. The same level set as a buy Market order could not have waited; it would have filled at 1.0840 immediately.
The non-fill risk is the price of the protection. Across many trades, limit entries that do fill carry no entry slippage, but the trades that get away unfilled are a real cost that does not show on any statement. Whether the trade-off favours the limit or the Market order depends on how often the chosen level is reached versus missed, which is a property of the strategy, not of the order type.
Good-till-cancelled versus day orders
A limit order has to specify how long it stays live. A day order expires at the end of the trading day if it has not filled, so a level not reached is cleared overnight and will not fill on the next session's open. A good-till-cancelled order, often shortened to GTC, stays active across sessions until it fills or the trader removes it, though many brokers expire it after a set period such as 90 days. The choice matters most around the daily rollover and the weekend: a GTC buy limit left under the market can fill on a Monday gap at a level the trader set on Friday and forgot, the opposite of the Slippage a Market order faces but a surprise all the same.
Limit orders as exits, not only entries
The same instruction works on the way out. A take-profit is a limit order placed on the profitable side of an open position: a long EUR/USD entered at 1.0850 with a take-profit at 1.0910 closes when the bid reaches 1.0910 or better, locking the gain without the trader watching the screen. Paired with a Stop-loss on the other side, a take-profit limit defines both ends of the trade in advance, so the position closes at a planned price whichever way it resolves.
Order typesHow the market, limit, stop, and stop-limit instructions compare, and when each is used.Related terms
Related articles
Common questions
Will a limit order always fill if price reaches it?
Usually, but not guaranteed at the exact level. If price trades clearly through the limit, the order fills at its price or better. If price only touches the limit and reverses, the fill depends on whether enough volume traded at that level to reach the order in the queue, so a limit that is only tagged may fill partially or not at all. A limit that the market trades decisively through is reliably filled.
What is the difference between a limit order and a stop order?
A limit order fills at its price or better and is placed where the trader wants a better price than the current market: a buy limit sits below the market. A stop order triggers at its level and then becomes a market order, and it is placed where the trader wants to act once the market reaches a level: a buy stop sits above the market. A limit waits for a better price; a stop fires on a breakout and accepts the market price beyond the trigger.
What does good-till-cancelled mean?
A good-till-cancelled order, or GTC, stays live across trading sessions until it either fills or the trader cancels it. It is the alternative to a day order, which expires at the end of the session if it has not filled. The practical difference shows around the rollover and the weekend: a GTC limit left resting can fill on a later session's gap at a level set days earlier, whereas a day order would have already expired.
Is a take-profit a limit order?
Yes. A take-profit is a limit order set on the profitable side of an open position, so it fills at its price or better and closes the trade in profit. Because it is a limit, it carries no downside slippage: it will not close at a worse price than set. The trade-off is the same as any limit — if price approaches the take-profit but turns back short of it, the order does not fill and the open profit can evaporate.