limit order

What Is a Limit Order (LimitOrder)?

A limit order is an order type that executes only at a specified price or better.

This method allows traders to set a target price in advance: buy orders will only be filled at the set price or lower, and sell orders only at the set price or higher. Unlike a market order, which executes immediately at the best available price, limit orders give you control over the execution price. Your order may enter a queue and wait for a match, and it may be partially filled, with the remainder staying open in the order book or canceled if it expires.

On an exchange order book, limit orders are placed in the appropriate price tier and matched on a “price-time priority” basis. Buy limit orders typically sit below the current market price, while sell limit orders are above. Your order only executes when the market price reaches your specified level and there is sufficient counterparty liquidity.

Why Should You Understand Limit Orders?

Limit orders allow you to control trade execution prices, reduce slippage, and often benefit from lower maker fees.

Slippage refers to the difference between your expected execution price and the actual filled price, which can be significant during volatile market conditions. Since limit orders only execute at your set price or better, they help minimize slippage—making them suitable for traders with strict budget constraints.

Most exchanges offer lower fees or rebates for “maker” orders—those that add liquidity by waiting in the order book—compared to “taker” orders that execute instantly against existing orders. Over time, these fee differences can provide a significant cost advantage for active traders.

Limit orders also enable advanced strategies such as “laddered buying/selling” or combining take profit and stop loss actions. For example, in highly volatile markets, you can split your buy order across multiple price levels to gradually build a position and smooth out your average entry cost.

How Does a Limit Order Work?

A limit order enters the order book at your specified price level, waiting to be matched based on price and time priority.

If you place a buy limit order below the current market price, it will queue until matched; if you set the price above the current market level, it may execute immediately, essentially functioning as a taker order—with different fee rates and slippage characteristics. The same logic applies to sell limit orders: those set above the market wait in the book, while those set below may fill instantly.

Partial fills can occur when available liquidity is insufficient. For instance, if you place a buy limit order for 1 BTC but only 0.3 BTC is available at your price, 0.3 BTC will fill immediately while the remaining 0.7 BTC continues to wait until more matching sell orders arrive or you cancel the order.

Limit orders can also have different durations. The most common is “Good Till Cancelled” (GTC), meaning your order stays in the book until you manually cancel it or it fills completely. You may also specify a fixed expiration time; too short a window may miss opportunities, while too long requires active risk management.

How Are Limit Orders Used in Crypto Markets?

Limit orders are widely used in both spot and perpetual futures trading on exchanges, accounting for most of the liquidity-providing volume.

In spot markets—for example, on Gate’s BTC/USDT pair—users submit buy limit orders below the current price tier; these are executed as the market moves down to meet those prices. Sell limit orders are often used to take profit at target prices and are matched as buyers reach those levels.

For perpetual contracts, limit orders work alongside leverage and margin trading features. Traders use them to average into positions at key support levels or scale out at resistance zones—helping avoid high slippage and taker fees that can occur during rapid market moves.

In DeFi, some decentralized exchanges and aggregators offer on-chain limit order functions (often via smart contract escrow and execution). These allow for precise pricing outside AMM models, but execution may experience delays due to network fees and reliance on third-party executors—requiring wider price buffers.

How to Use Limit Orders on Gate and Reduce Slippage?

Step 1: Choose your trading pair and select “Limit” mode. On Gate’s spot or derivatives page, pick your target pair and switch to “Limit Order”.

Step 2: Set your price and amount. For buys, choose a price at or below your desired entry point; for sells, set your target take-profit price. Review order book depth to avoid thin liquidity tiers.

Step 3: Use Post Only for maker protection. Selecting “Post Only” ensures your order doesn’t execute immediately against existing orders, guaranteeing you pay maker fees instead of taker fees and reducing slippage.

Step 4: Place orders in batches and set appropriate expiration times. Split large positions across several price tiers for higher fill probability and better average cost; set reasonable order durations to avoid forgotten risk exposure.

Step 5: Trade during periods of high liquidity. Liquidity means greater available depth in the order book. Choose active market hours for improved execution rates and minimal slippage.

Note: Slippage is the gap between your intended and actual execution price. To minimize slippage, always use limit orders, avoid thinly populated price tiers, and steer clear of trading during major news events or highly volatile moments using market orders.

What Are Recent Trends or Data Points About Limit Orders?

This year, exchanges have optimized maker fee structures to incentivize liquidity provision. Maker (limit) fees are generally lower than taker (market) fees—typically ranging from -0.01% to 0.10% for makers and 0.05% to 0.20% for takers—driving increased adoption of limit orders.

Q3 2025 data shows that aggregate depth across the top five levels of major trading pairs’ order books rose approximately 10%–25% over 2024 averages. Deeper books improve both limit order fill rates and batch execution strategies. In recent months, usage of conditional orders (such as take-profit/stop-loss combinations with limits) has grown 20%–30% among exchange users.

Throughout 2024, limit orders accounted for approximately 70%–85% of spot market executions. As volatility eased and fee incentives increased in leading exchanges this year, the share of limit order activity has held steady or risen slightly.

How Do Limit Orders Compare to Market Orders?

Limit orders focus on execution price—they may require patience or result in partial fills. Market orders prioritize immediate execution at the best available price but with less control over the final rate.

During periods of fast-moving prices or thin order books, market orders can incur significant slippage and higher taker fees; limit orders lock in your desired price but may not fill entirely or miss moves altogether. If speed and catching momentum are critical, market orders are preferable; if cost control and precise pricing matter most, use limit orders.

Practical tip: Use small market orders for immediate entry during major breakouts, then employ limit orders to optimize average cost or set profit targets; during sideways markets, rely primarily on limit orders at key zones and wait patiently for execution.

Related Terms

• Limit Order: An order type where traders specify an exact price to buy or sell an asset—the order executes only if the market reaches that target.
• Market Order: An order to buy or sell immediately at the best available market price; fast execution but potentially less favorable pricing.
• Order Book: A real-time list of all open buy and sell orders on an exchange, showing supply and demand at various price levels.
• Slippage: The difference between the expected trade price and actual executed price—often greater during high volatility.
• Liquidity: The ease with which an asset can be bought or sold without significantly affecting its price; higher liquidity means easier trading.

FAQ

What’s the Difference Between Bid Price and Ask Price?

Bid Price is the highest amount buyers are willing to pay; Ask Price is the lowest sellers are willing to accept. The difference between them is called the spread—a smaller spread indicates better market liquidity. On Gate, the buy price you see is typically the Ask Price, while the sell price is usually the Bid Price.

Why Didn’t My Limit Order Fill?

There are two common reasons: either your set price doesn’t match current market conditions (e.g., your buy price is too low or sell price too high), or there’s not enough market volume at your level for a match. Consider adjusting your price closer to real-time rates or use a market order for faster execution.

What’s the Relationship Between Limit Orders and Stop Orders?

Limit orders and stop orders are separate types. A limit order specifies a particular buy/sell price; a stop order acts as a protection mechanism to limit losses. On Gate, you can combine them—such as setting both a buy limit and a stop-loss sell—to create a comprehensive trading strategy.

How Long Can I Set a Limit Order’s Duration?

Limit order duration depends on exchange rules. On Gate, most limit orders follow GTC (Good Till Cancelled), meaning they remain open until filled or manually canceled. Some pairs may allow you to specify an expiration time; always check each trading pair’s specific rules.

How Can Limit Orders Help Lower Trading Costs?

Limit orders let you transact at ideal prices, avoiding excessive slippage associated with market orders. The strategy is to place buy limits slightly below current prices or sell limits slightly above—then wait patiently for execution. On Gate, smart use of limit orders along with proper market analysis can significantly reduce unnecessary trading fees.