What is Limit Order ? How to use Limit Order ? How Limit Order Works ? #CFJ #Shorts

In this video of CFJ Shorts we have explained What is Limit Order ? How to use Limit Order ? How Limit Order Works ?

A limit order is an order with a specific buy or sell price. To place a limit order, you need to set a maximum or minimum price you’re willing to buy or sell an asset. Your order will then be placed on the order book and will only be executed if the market price reaches the limit price (or better).

Unlike market orders, where trades are executed instantly at the current price, a limit order gives you more control over the execution price. As limit orders are automated, you don’t have to watch the market 24/7 or worry about missing a buy or sell opportunity while you sleep.
However, there is no guarantee that your limit order will be executed. If the market price never reaches the limit price, your trade will remain unfilled on the order book. Typically, a limit order can be placed for up to a few months, but it depends on the crypto exchange you are using.

How does a limit order work?
When a limit order is submitted, it will be placed on the order book immediately. But It won’t be filled unless the coin price reaches the specified limit price (or better). For example, you want to sell 1 BTC at $35600, and the current price is $35500. You can place a BTC sell limit order of $35600. When the BTC price reaches the target price or above, your order will be executed depending on market liquidity. If there are other BTC sell orders placed ahead of yours, the system will execute those orders first. Your limit order will be filled afterward with the remaining liquidity.
Another thing to consider when placing a limit order is the order’s expiration date. In general, limit orders can last up to 90 days. Unless you watch the market closely, you might end up buying or selling at a less desirable price due to market volatility. For example, the current market price of BTC is $35500, and you placed a sell limit order of 1 BTC at $35600. After a week, the price of BTC surged to $35700. As the market price has crossed the limit price you set, your order was executed at $35600. In this case, your profits were limited by the target price you placed a week ago. Therefore, it is recommended to review your open limit orders from time to time to keep up with the ever-changing market conditions.
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Видео What is Limit Order ? How to use Limit Order ? How Limit Order Works ? #CFJ #Shorts канала CFJ Shorts