How to Place a Limit Order

A while ago we published an article on different crypto order types, this time we’ll be taking a closer look at limit orders and how you can easily place a limit order on the Finst platform. You may ask yourself, what exactly is a limit order? Let's take a closer look.

What is a Limit Order?

A limit order is an instruction to buy or sell a cryptocurrency at a specified price or better. A common use of limit orders is when you expect the price of a crypto to decrease and want to buy at a lower price than currently, or if you want to take your profits automatically.

For example, you may decide to buy Bitcoin (BTC) but only when the price drops to €58.000 or lower. In this case, it would be beneficial to place a limit order to buy Bitcoin with a limit price of €58.000. Your order would only be executed if the current market price is at €58.000 or lower. The same would occur if you place a limit order to sell Bitcoin at a limit price of €60.000. Then, the order would be executed automatically once this limit price is reached.

Now that we’ve looked at an example, let’s explore the advantages and disadvantages of limit orders.

Pros and Cons of Limit Orders

The main advantage of limit orders is that you can seize market opportunities by trading automatically and thus save time while having more control over your investment strategy.

Limits orders can have different validities. On our platform, you can choose between three validities: Good Till Cancelled (GTC), End of day, or custom date. GTC is the default when you place a limit order. This means that your order will remain open on the market until it is executed, or until you cancel it.

On the flip side, limit orders do not come with an execution guarantee if the specified price is not reached or the quantity is not (fully) available in the order book. An order book is an electronic list of buy and sell orders for a cryptocurrency organized by price levels. Therefore, we always recommend you to actively monitor your open orders.

And now for the most exciting bit, how you can place a limit order on the Finst platform.

How to Place a Limit Order with Finst

Before we begin, if you’re looking to buy crypto, make sure that your account has a sufficient EUR balance for you to place your limit order.

1. Select the cryptocurrency you would like to trade.
2. Click on either “Buy” or “Sell”.
3. At the top, on the right-hand side, you will see a button that says “Market” followed by an arrow pointing down.
4. Click on that button and an order window will appear.
5. Here you should see three options: Market (which is selected), Limit, and Auto Invest.

6. Select “Limit”.
7. Now, following our previous Bitcoin example, you can add €58.000 to the “Limit price” field and enter 1 into the “Quantity” field.

8. Before you click on the “Buy” button, check out the option below the button on the right. This should say “GTC” with an arrow pointing down.
9. Click on this, here you can choose how long your limit order will be valid for.

10. Once you have chosen the validity of your limit order, click save.
11. Now you’re ready to click on “Buy”.
12. Congratulations, you’ve just placed a limit order!

We hope you enjoy this highly requested new order type and wish you happy trading!