What is a Limit Forex Order?

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What is a Limit Forex Order?
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Index

• 1. What is a Limit Forex Order?
• 1. Buy Limit Forex Order
• 2. Sell Limit Forex Order
• 2. Pro Con of Limit Order

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What is a Limit Forex Order?

• A Limit Forex Order is an order to buy or sell at
  a specified price or a better price than the
  specified price.
• Limit orders have two types of component- buy
  limit Forex order and sell limit Forex order (Buy
  Limit and Sell Limit).

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• Limit orders are of two types
• 1. Buy Limit Forex Order
• 2. Sell Limit Forex Order

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1. Buy Limit Forex Order
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• A Buy Limit is used when the trader looks that
  the prices of the asset will fall down initially
  before they start to increase again.
• If the prices will fall down before they
  increase, a market buy order cannot be used
  because this will cause the immediate negative
  value to the position.

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• There is no way of knowing before initiating a
  trade how negative a position can become before
  recovery.
• Therefore a buy limit is set up by using an entry
  price which is lower than the market price.

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2. Sell Limit Forex Order
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• A Sell Limit is used when the trader looks that
  the price of the asset will first be unfavorable
  before it falls.
• If prices increase before they fall, a market
  sell order will cause the position to have an
  immediate negative value. To avoid this, a Sell
  Limit is used.

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Pro Con of Limit Order

• Pro It will be at your stated price or better
• Con May take some time to fill and sometimes it
  doesnt fill at all if the price is moving too
  quickly.