A buy limit sits below the current price and a sell limit above it, waiting in the order book until another trader matches it. A buy limit never fills above your price and a sell limit never below it. A limit placed on the other side of the market, such as a buy above the best ask, fills at once like a market order and pays the taker fee.
Example
BTC trades at $61,250. You place a buy limit for 0.2 BTC at $60,800. Price dips to $60,780 and your order fills at $60,800, paying a 0.02% maker fee of about $2.43 instead of a 0.05% taker fee of about $6.08. Had price turned at $60,850, you would have no position at all.
Why it matters
Limit orders control your price and cut fees, which add up fast for active traders. They let you enter at planned levels instead of chasing price. The trade-off is that you will miss moves that never come back to your level.
Common mistake
Moving a limit order to chase price after it runs away. That usually ends with a worse entry than a market order would have given, at the worst moment. If the setup has left without you, let it go.
Put it into practice
FAQ
- Is a limit order always a maker order?
- Only if it rests on the book first. A limit that crosses the spread fills immediately and is charged as a taker. Use post-only if you want to guarantee the maker fee.
- Can a limit order fill partially?
- Yes. If only part of the quantity trades at your price, the rest stays on the book until it fills or you cancel it.
- What happens to a limit order that never fills?
- It stays open until it is filled, cancelled or expires, depending on its time in force, for example GTC (good till cancelled).