What is a limit order?

A limit order is an instruction to buy or sell an asset at a specific price or better, rather than whatever the current market price happens to be. It matters because it gives you control over your entry or exit price, protecting you from slippage during fast-moving or thin markets. The tradeoff is that a limit order might never fill if the market never reaches your price.

For example, if Bitcoin trades at $60,000 and you set a buy limit order at $58,000, the trade only executes if the price drops to $58,000 or lower. If it stays above that, your order sits unfilled on the exchange's order book. This contrasts with a market order, which fills immediately at whatever price is available, sacrificing price control for speed.