Limit orders are instructions placed by a trader to buy or sell a financial asset, such as a cryptocurrency, at a specific price or better. Unlike market orders, which execute immediately at the current market price, limit orders wait for the market to reach the desired price point. They provide traders with control over the execution price. This trading strategy helps manage risk and optimize entry or exit points.
Context
Limit orders are a fundamental tool for traders on crypto-fiat exchanges and decentralized trading platforms. News and analysis often reference the placement of large limit orders as indicators of significant support or resistance levels in asset prices. Understanding limit orders is crucial for comprehending market dynamics and trader positioning. They play a significant role in market liquidity and price discovery.
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