Limit Order

Definition and mechanics

A limit order sets the worst accepted price: a buy limit order fills only at the limit or below, a sell limit order only at the limit or above. Until execution the order sits visibly in the order book and itself provides liquidity there – which is why limit orders count as “maker” orders while market orders remove liquidity as “takers”. Some exchanges reward maker orders with lower fees. If the limit is placed inside the current range, the order can partly avoid the bid-ask spread: instead of buying at the ask, the trader waits until a seller delivers at their own price.

The trade-off: price versus execution

The limit order inverts the market order's risk: instead of price uncertainty the trader carries execution uncertainty. Three scenarios are typical: the order fills completely at the limit or better; it fills partially (partial fill) when not enough volume sits at the limit price; or it does not fill at all because price never reaches the limit – the trade is missed. Particularly bitter is the scenario “price turns one tick before the limit”: the planned setup runs without the trader. Those prioritising execution therefore combine limit logic with tolerance (limit slightly above the desired price) or use market orders for time-critical exits.

Use in day-to-day trading

Limit orders are the tool of planned actions: entry at a level retest, adding at a zone, profit-taking at the target (take-profit orders are technically sell limit orders). Combined with stop logic, more complex types arise such as the stop-limit order or OCO structures. Time-in-force qualifiers (GTC, IOC, FOK) control how long and how completely the order stays in the market.

Why it matters for traders

The choice between limit and market is a deliberate cost decision: price control and spread savings versus execution certainty. In the GlanWick simulator both order types can be compared on the same setup by way of example – GlanWick is a training and simulation tool and not a prop firm itself.