In this article, I will be showing you how to place a limit order on the Binance exchange.
On Binance and every other exchange platform, there are different types of orders you can place, and each of these orders has different implications for your trading.
So in this post, I will be showing you what a limit order is and how you can place it in the binance classic trading interface.
I am not going to get into other types of orders, but if you want to learn more about them, you can do that here.
What is a limit order And How Does it Work?
A limit order is an order to buy or sell an asset at a future price.
Here is how limit order works.
When a limit order is submitted to the Binance exchange, it won’t be executed instantly, but rather it held up to the order book till your predefined conditions are met.
Let me illustrate this with an example.
Let’s say you want to buy Bitcoin or any other cryptocurrency on an exchange, and the price is $40,000. If, from your market analysis, you discovered that the price would still fall to $38,000, you can place an order to buy it at that price by using a limit order. Once you place this order, it will stay pending until the price of Bitcoin falls to $38000 or less, before the order is executed. If there are similar limit orders placed before yours, those orders will be executed first.
Why do traders place limit orders?
Traders place a limit order because, due to environmental distractions, they might not be at the trading platform to monitor the market movement and take decisions as they normally would. Instead, they use the limit order to place a future order to profit from the market in their absence.
Form of limit order.
There are two scenarios in which a limit order can be placed in trading, and each of these scenarios can be classified as the major types of limit order. So let’s take a look at each of them.
1. Buy Limit order.
A buy limit order is an order to buy an asset at a lower price in the future.
Here’s is an example.
Let’s say the price of Bitcoin Cash is $100 and, from your market analysis, you discovered that it will still fall to $80 before it starts rising and you may not be at the market till then. You can place an automatic buy order at that price ($80). Such an order is called a buy limit order and it does not execute instantly, instead it stay pending till your conditions is met.
2. Sell Limit Order.
A sell limit order is an order to sell an asset at a future price.
Here is an example.
Let say the price of Bitcoin Cash is $100, and from your market analysis, you discovered that the price of Bitcoin Cash will rise to $120 and you may not be at the market till then. You can place an order to sell your Bitcoin Cash automatically at that price ($120) and such an order is called a sell limit order.
3 Steps On How to place a limit order on Binance
So let me now walk you through the steps that will help you understand how to place a limit order on the Binance exchange.
Step1: Click on “spot and wallet” at the top right of the Binance home page.
Once you are signed into your Binance account, the first thing you need to do to place a limit order is to hover over the “wallet button” located at the top corner of your account. Once you do that, it will bring up a list of options. From there, you then select the “spot and wallet option.”
Step2: Choose the coin you want to buy and click on “Trade”.
Once you are on the “spot and wallet page,” you will see a list of cryptocurrencies available for you to select from. Then look for the one you want and then click on trade.
Once you do that, it will prompt you to select the pair you want to bid on. Let’s say you want to buy Bitcoin with USDT or sell your Bitcoin to USDT. You select the pair and proceed to the next step.
Step 3: Input the price and the number of coins you want to buy.
Once you select the pair you want to trade, you will be taken to the Binance Classic trading interface.
There, you have the option to enter the price at which you are willing to buy the coin and the amount of it you want. Once you do this, you then click on “Buy” and your order will stay pending till the price of Bitcoin reaches $38000.
And that is all for placing a limit order on the Binance exchange.
Limit Orders vs. Stop-Limit Orders
There are certain similarities and differences between a limit order and a stop-limit order in trading. So it is good that I give you a comparison between the two of them so that you can make a better decision on the type of order to place.
- Both stop-limit orders and limit orders allow you to enter the price at which you are willing to buy or sell an asset.
- Unlike market orders, stop-limit orders and limit orders are not filled instantly; they are moved to the order book till the predefined conditions are met.
A stop-limit order allows you to set a stop order (a price at which you would like to trigger the execution of your limit price), while a limit order doesn’t.
When the stop order price is reached, a stop-limit order becomes a limit order.
- There is no guarantee that both stop-limit and limit order will be fulfilled. In each case, the order remains on the order book till it is either triggered or closed by the investor.
In the Binance trading interface, as on any other exchange, there are different order types, and each of them has different implications for trading. Having shown you how to place a limit order on the Binance exchange, we urge you to study other order types so that you make the right decision on what order you will be setting while trading.
As always, all the information on this page is based on our experience and the research we have done. You can refer to our disclaimer page to know how you treat information on this website.