A limit order is a type of crypto order instructing the exchange to purchase a token at a set price. Usually, the said price is set by the trader. The trader sets the price that they want to buy a cryptocurrency.
It is meant for those crypto traders who are ready to wait for the token's price to reach the target price.
In some cases, the set price may be met, but in other cases, it is not.
Those crypto traders who want to buy cryptocurrencies instantly should opt for another crypto order called a market order. You are ready to buy a token instantly at the best rate in a market order and want the order to be filled immediately.
The same can't be said for a limit order.
If you are in a hurry to fill the trade, then the limit order may not be the right choice. The exchange will only purchase the chosen cryptocurrencies once the set price is met.
Advantages of Limit Order
Crypto limit orders are designed to offer traders a higher level of flexibility compared to market orders. Here, the trader sets the price and amount that they want.
As a result of the high level of flexibility, traders are given the leeway to manage their portfolios and risk.
The trader does not have to watch the charts every second because their order will automatically be done once the conditions are met.
Disadvantages of Limit order
Limit orders are executed only if the chosen price is attained. This condition may be met in some cases, but the execution is not done. This is because the orders are done on a first come first serve basis. Before it gets to your turn, the orders of others may have been executed, leaving no space for yours. Sometimes, it can be partially met.