How to Use Limit Orders
Limit orders let you control your entry and exit prices. Instead of accepting whatever price the market gives you, you set your own terms.
Limit vs Market Orders
| Feature | Market Order | Limit Order |
|---|---|---|
| Execution | Immediate | When price is reached |
| Price | Best available (unknown) | Your specified price |
| Guarantee | Will fill (maybe bad price) | Good price (might not fill) |
| Fees | Taker fees (higher) | Maker fees (lower) |
| Best For | Urgent trades | Patient traders |
A limit order says: "Only execute this trade at my price or better."
Buy Limit: "Buy at $40,000 or LOWER"
Sell Limit: "Sell at $50,000 or HIGHER"
When to Use Each:
- Market order: You need to buy/sell NOW, price doesn't matter much
- Limit order: You want a specific price and can wait
Placing Buy Limit Orders
Use buy limits to catch dips and get better entry prices.
Example Scenario:
Bitcoin is at $50,000. You think it might dip to $45,000.
- Place a buy limit at $45,000
- If BTC drops to $45,000, your order fills automatically
- If BTC never drops, your order sits unfilled
How to Place (General Steps):
- Go to trading interface
- Select "Limit" order type
- Choose "Buy"
- Enter your limit price (below current price)
- Enter amount to buy
- Review total cost
- Click "Place Order"
Place buy limits at:
- Round numbers ($40,000, $45,000)
- Previous support levels
- Percentage drops (5%, 10%, 20% below current)
Multiple small limit orders at different prices = "layered" buying
Placing Sell Limit Orders
Use sell limits to lock in profits at target prices.
Example Scenario:
You bought Bitcoin at $40,000. You want to sell some at $60,000.
- Place a sell limit at $60,000
- If BTC rises to $60,000, your order fills automatically
- You lock in 50% profit without watching charts
How to Place:
- Go to trading interface
- Select "Limit" order type
- Choose "Sell"
- Enter your limit price (above current price)
- Enter amount to sell
- Review what you'll receive
- Click "Place Order"
Market conditions change. A sell limit at $60,000 might be too low if BTC is mooning, or unrealistic if it's crashing. Periodically review and adjust your limit orders.
Advanced Limit Order Strategies
Laddering (Multiple Limits):
Instead of one big order, place multiple smaller orders at different prices:
- Buy $200 at $45,000
- Buy $200 at $43,000
- Buy $200 at $40,000
- Buy $200 at $38,000
This averages your entry price and catches multiple dip levels.
Scaling Out (Taking Profits Gradually):
- Sell 25% at $50,000
- Sell 25% at $55,000
- Sell 25% at $60,000
- Hold 25% for "moon"
This locks in profits while maintaining upside exposure.
Stop-Loss + Take-Profit Combo:
- Stop-loss: Sell if price drops to protect against big losses
- Take-profit: Sell limit to lock in gains
- One cancels the other when triggered
OCO = "One Cancels Other"
Set both a take-profit AND stop-loss. When one triggers, the other automatically cancels. Available on most major exchanges (Binance, Kraken, etc.)
- Price might never reach your limit (missed opportunity)
- In fast markets, limit might fill at worse prices than expected
- Open orders tie up your funds/margin
- Don't forget about old orders!