What Is a Limit Order in Crypto Investing?

By Juliet D'cruz

The last few years have made many people more interested in Bitcoin trading. The economic downturns caused by COVID lockdowns caused severe inflation, making Bitcoin a more attractive alternative to fiat currencies. 

If you are a beginner then you must have heard of crypto arbitrage bot and other kinds of bot to get a good start. If you’ve been crypto investing long, you may notice that traders use different types of crypto orders to trade assets. One popular order type is the limit order.

A limit order allows traders to buy or sell Bitcoin at a specified limit price. Sometimes, you can even trade these assets at better prices than those specified. If you are a trader in Australia, Swyftx trading platform allows you to view your real-time profit and loss on all digital assets you own. It makes bitcoin trading australia easier.

How does this work? If that’s what you want to know, keep reading! We’ll explore this type of order in the guide below. 

How Does a Limit Order Work?

A limit order is a two-way order type that applies to purchases and sales. What does this mean for you? 

As a buyer, you can execute a limit order for a limited price or lower cost. Similarly, as a seller, you can execute the order for a limited price or a higher fee. 

This way, traders have more control of the prices in their trades. These orders guarantee that investors or traders pay the limit price or less. However, the order can only execute if the cryptocurrency price meets all the necessary order qualifications. 

Limit orders are a popular option for many patient investors. But, there are other types of orders that traders also enjoy. We’ll explore how limit orders compare to these in the following sections.

Limit Orders and Market Orders

Market orders are a common approach to crypto trading. Their popularity stems from their transaction speeds; these transactions execute faster than any other order. 

A market order deals primarily with the execution of the order. The price of the trade is a secondary issue. If you search for the fastest BTC ATM near me, this transaction is what you’d use at the teller.

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Limit Orders and Stop Orders

A stop order can come in several forms. But, all stop orders rely on a price currently unavailable in the market when traders place the order. When that future price becomes available, it initiates the order. 

A stop order turns into a traditional market order once the market either meets or exceeds the stop price. This approach is why you’ll sometimes hear these referred to as a stop-limit order.

The biggest difference between limit orders and a stop order is the transaction’s visibility. A limit order is immediately visible to the entire crypto market. However, a stop order only becomes visible if the market price triggers the order.

So, how should you set these prices? If Bitcoin (or another cryptocurrency) has a rising value, place the market order above the market price.

Consider Trying a Limit Order Today

A limit order is often a successful way to ensure you get a trade that works for you. Whether you want to purchase or sell an asset, these orders can help you get the goal you want. So, try this order out and see what results you get!

We hope you enjoyed this article! If so, check out our other content today.

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