What is a limit order

A limit order is a trading order that sets a limit on the price at which an asset can be bought or sold. When you trade with a limit order, you specify a maximum or minimum price at which you are willing to buy or sell an asset. If the market price reaches the limit you set, the trading system will automatically complete the trade. The advantage of using limit orders is that it can help investors control transaction costs and effectively avoid losses caused by market price fluctuations.