A limit order is an instruction to buy or sell a financial instrument, such as a CFD, at a specified price that is more favourable than the current market price. For a buy limit, the target price is below the current market price. For a sell limit, it is above.
The order executes only if the market reaches the specified price. If it does not, the order remains open and unfilled.
You can apply a Good Till Cancelled (GTC) setting to keep the order active until either it is filled or you cancel it manually.
Example:
- Gold CFD is trading at $3,300.
- You want to buy only if the price falls to $3,250.
- You place a Buy Limit order at $3,250.
- The position opens only if the market reaches $3,250 or lower.