A limit order is a type of order placed by an investor to buy or sell a security at a specific price or better. Unlike a market order, which executes immediately at the prevailing market price, a limit order allows investors to set a specific price at which they are willing to buy or sell an asset.

When placing a limit order to buy, the investor specifies the maximum price they are willing to pay. If the market price reaches or falls below this limit, the order is executed. Similarly, when placing a limit order to sell, the investor sets the minimum price at which they are willing to sell. If the market price rises to or exceeds this limit, the order is executed.

Limit orders provide investors with greater control over their trades and protect them from unexpected price fluctuations. However, there is a possibility that the limit order may not be executed if the market does not reach the specified price. It is essential for investors to carefully consider their limit price and monitor the market conditions to ensure timely execution of their orders.

A limit order is a type of instruction given to a broker to buy or sell a financial asset (like stocks, forex, or commodities) at a specific price or better. Unlike a market order, which executes immediately at the current market price, a limit order only triggers if the asset reaches the predefined price.

For a buy limit order, the order executes when the price falls to or below the set limit price, allowing the trader to buy at a favorable price. A sell limit order activates when the price rises to or above the limit price, ensuring the trader sells at a desirable price.

Limit orders offer more control over the entry and exit points in trades but may not always execute if the market doesn't reach the specified price.