[Source](https://pixabay.com/photos/chart-trading-courses-forex-1905224/)
Hello friends,
It's me @okere-blessing, it's my pleasure to share with you all on this topic, knowledge on limit order.
Please followup so you can gain an extensive knowledge on the operation of limit order.
WHAT IS LIMIT ORDER
A cryptocurrency limit order is basically a trading order or instruction set by an investor or trader to buy or sell a cryptocurrency or his or her digital assets when it hits or reaches a particular or specific price.
For me I would say that the cryptocurrency limit order has proven to be a helpful and necessary tool in the world of cryptocurrency trading, it reduces stress of price monitoring and allows traders to make specific and precise trading transactions.
You might be wondering, is market order the same as cryptocurrency limit order? Well it isn't because unlike market orders, which execute at the current market price, cryptocurrency limit orders on the other hand allow traders to set a particular price requirements for buying or selling assets.
ADVANTAGES OF LIMIT ORDER
Without talking further on the definition or explanation of the concept of cryptocurrency limit order, let see some of the advantages of its, shedding light on the role limit orders play in optimizing trading strategies and mitigating risks in very volatile markets and how it tops market orders.
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RISK MANAGEMENT|
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The most common cryptocurrency limit orders like the **stop loss** and the **take profit** play a crucial role in risk management by allowing traders to seamlessly define and set their risk exposure and mitigate potential losses.
By implementing or setting stop loss orders, traders can establish predetermined exit points to limit losses in case of adverse price movements and likewise also by setting take profit orders traders can lock in potential profits by automatically selling assets at a pre stated price.
These tools were designed to make the adoption of risk management very easy and stress free, the stop loss and take profit orders also help traders to protect their capital and preserve profitability in volatile markets.
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REDUCES MARKET VOLATILITY|
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Because cryptocurrency limit orders have risk management as one of their advantages, they therefore help to reduce the impact of market volatility by allowing traders to set very precise market entry and exit points for the positions they hold.
[Source](https://pixabay.com/photos/stock-market-trading-stocks-6531146/)
This also is an advantage that market orders does not offer because during volatile cryptocurrency markets, sudden price fluctuations and movements can lead to unfavorable execution prices for market orders thereby causing traders to incur loss.
But unlike the market orders, setting limit orders at predetermined price levels does not lead to unfavorable execution but rather it allows traders to avoid impulsive decisions and navigate market turbulence with greater confidence and control.
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FACILITATES COST EFFICIENCY|
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Another advantage of employing cryptocurrency limit orders is that it offers and facilitates cost efficiency through the minimization and reduction of trading fees or cost and optimization or maximization of execution prices.
Also, in contrast to market orders, which most likely incurs higher trading and execution fees due to its immediate execution at the prevailing market price, limit orders rather allows traders to access better execution prices by giving them time to wait for predetermined price levels.
This advantage of cost efficiency is most especially beneficial for institutional investors or higher volume traders who are executing very large order transactions in the cryptocurrency market.
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ENSURES PRICE CONTROL AND TRADING PRECISION.|
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Another advantage infact one of the primary and basic advantages of employing and implementing cryptocurrency limit orders is that it possesses the ability to exercise precise and very firm control over transaction prices.
Limit order allows you to clearly and precisely state and specify your desired buying or selling price and by doing this traders can ensure that their orders are executed at what they choose to be the best price levels based on proper risk management.
This precision in trading allows and create opportunities for traders to maximize and capitalize on potential profit generating market, while still allowing proper implementation of strategic trading and calculated risk exposure.
CONCLUSION
[Source](https://pixabay.com/illustrations/finance-business-money-currency-8154775/)
Cryptocurrency limit orders represents and serves as a basic and fundamental tool that ensures and facilitates very effective trading strategies plus it offers a multitude of advantages that helps enhance trading precision, mitigate risk, and optimize profits even in very volatile markets.
Finally, by fully utilizing the provision of cryptocurrency limit orders, traders have been given the opportunity to strategically capitalize on market opportunities, make profit and attain a long lasting and viable source of generating revenue
