Limit Order

A limit order is an order to buy or sell at a specific price or better. A buy limit fills only at or below your specified price; a sell limit fills only at or above. The order rests in the order book until matched, cancelled, or expired. Limit orders are the foundation of disciplined entry pricing: instead of accepting whatever the market offers, you specify the price you are willing to trade at and wait.

Why limit orders matter

Market orders accept the best available price immediately, which means you pay the bid-ask spread (and possibly more during fast moves). Limit orders make you the maker rather than the taker: you provide liquidity to the book at your specified price, and when someone hits your order, they pay the spread to you. On most exchanges including Hex37, makers receive a fee discount or rebate compared to takers. Over hundreds of trades the fee differential is meaningful.

How limit orders work on Hex37

When you place a limit order, it joins the order book at your specified price level. Hex37 stores all limit orders in Redis sorted sets keyed by symbol and side, so retrieval and matching are O(log n). On each tick, the execution engine checks whether the current price has reached any resting limit orders; if so, those orders are matched in price-time priority. A 70% to 100% probabilistic fill rate at the inside of the book reflects the fact that passive limits are not guaranteed instant crosses even when price visits the level.

Limit orders and slippage

Limit orders are the primary defense against slippage. On a market order, the executed price can be 0.1% to 0.5% worse than the intended price during fast moves, especially on thinner books. On a limit order, you either get your price or you don't get filled. The trade-off is execution certainty: a limit at a level price does not reach is a missed trade. Most experienced traders default to limit orders for entries and switch to market orders only when execution speed matters more than price improvement (during stop-outs, for example).

Common limit-order mistakes

• Placing limits at obvious chart levels without buffer. Limits cluster at round numbers and get bypassed when price reverses just short of them. Place limits slightly inside the obvious level.
• Chasing the price with successive limit orders. If your first limit does not fill, the move is often gone; placing a second limit higher means you are buying into a worse setup.
• Forgetting that limits do not fill in fast markets. During fast moves the book moves through your level without filling because all the liquidity is consumed before your order reaches the top of the queue.
• Using limits when execution speed matters more than price. Stops should usually be market-on-trigger, not stop-limit, because a stop-limit can fail to fill in fast moves and leave you in a worse position than just taking the slippage.