In financial trading, traders often need to place orders not at the current market price—but slightly above or below it—without waiting for the price to reach that level. These are called pending orders, which are submitted in advance to the broker, who commits to executing them once the asset’s price matches the specified level. This article explains Buy Limit and Sell Limit orders in detail.
Contents:
What Is a Limit Order?
Limit order is a type of pending order used to open a position at a price better than the current market price. It assumes the price will move toward a predefined level (limit) before reversing in the desired direction.
Limit orders are identified by the word limit in their names. Traders commonly refer to pending orders informally as “pending orders” or “pendings.”
Types of Limit Orders
There are two main types: Buy Limit and Sell Limit. Their logic is symmetrical—they enable precise trade execution based on market analysis, without requiring active trader involvement.
Buy Limit Order
Buy Limit order is a pending order placed below the current market price, allowing the trader to buy an asset at a more favorable (lower) price.
How Buy Limit Works
A Buy Limit order always triggers a purchase at a price better than the current market price—i.e., lower.
Suppose EUR/GBP is in an uptrend. You anticipate price will retrace to the trend’s support level at 0.7335, bounce, and resume its upward movement.
The current EUR/GBP price is 0.74003. Since you want to buy cheaper, you place the Buy Limit order at your anticipated bounce level—0.7335.
If price reaches that level, your long position opens automatically—even if your trading terminal is offline. All pending orders are stored on the broker’s servers, ensuring execution at the exact specified price—barring slippage.
How to Place a Buy Limit Order
1. In MetaTrader 4, access the order panel (same as for market orders). Under Type, select Pending Order, then choose Buy Limit.
2. Enter your desired entry price and click Place Order. The Buy Limit order appears on the chart and in the Terminal tab.
3. Next, attach Stop Loss and Take Profit levels. Pending orders appear under the Trade tab, below open positions, beneath the Balance line. Right-click the order and select Modify or Delete Order.
In the modification window, you can adjust the execution price, protective orders, and set an expiration date/time for automatic cancellation if untriggered.
Example: In our EUR/GBP example, we set Stop Loss below the prior swing low (0.7185), Take Profit at the trend resistance line (0.7715), and auto-cancel time at 22:00 on 09.10.2015.
Sell Limit Order
Sell Limit order is a pending order placed above the current market price, enabling the trader to sell at a higher (more favorable) price.
Sell Limit is natively supported in MetaTrader terminals. It executes at the Bid price and supports Stop Loss and Take Profit.
How Sell Limit Works
After analyzing the market, a trader expects price to rise to a specific level—then reverse downward. To capture the short entry at the reversal point, they place a Sell Limit order. Crucially, the short position opens at a price better than the current market price—i.e., higher.
Let’s illustrate with USD/CHF on the H4 timeframe. The pair is in a downtrend. You expect a corrective rally to the downtrend’s resistance at 0.9715, followed by resumption of the decline. You place the Sell Limit order at that resistance level.
The Sell Limit order becomes an active short position as soon as price reaches the specified level. Because the instruction resides on the broker’s server, no terminal uptime is required for execution.
How to Place a Sell Limit Order
In MetaTrader, open the new order window, select Pending Order, then choose Sell Limit from the list.
Enter the desired execution price. Click Place Order—the Sell Limit order appears on the chart and in the Terminal tab.
Like market orders, pending orders support Stop Loss and Take Profit. Right-click the order in the Terminal tab, select Modify or Delete Order, and enter your protective levels, expiration time, or adjust the entry price if needed.
In our USD/CHF example: Stop Loss is placed above the prior swing high (0.9770), Take Profit at the trend support line (0.95700), and auto-cancel time set to 23:00 on 09.10.2015.
Advantages of Limit Orders
Using Buy Limit and Sell Limit orders offers traders significant benefits. They save time—no need to monitor markets for ideal entry points (e.g., bounces off support or resistance). They also reduce slippage risk, guaranteeing execution at the exact price specified in the order.
Execution differs from market orders only in timing: limit orders trigger automatically when price hits the specified level. They’re widely used in channel-based and systematic strategies—delivering greater consistency and psychological comfort during trading.
FAQ
What is the difference between Buy Limit and Buy Stop?
Buy Limit is placed below the current price to buy cheaper; Buy Stop is placed above to enter on a breakout—both are pending orders but serve opposite market assumptions.
Can a limit order fail to execute?
Yes—if price never reaches the specified level before the order expires or is manually canceled, it remains unfilled and does not trigger.
Do limit orders guarantee no slippage?
They guarantee execution at or better than the limit price—but in fast markets or low liquidity, partial fills or requotes may occur depending on broker policy.
