{"id":45244,"date":"2023-04-04T14:14:05","date_gmt":"2023-04-04T12:14:05","guid":{"rendered":"https:\/\/staging.captrader.com\/glossar\/buy-limit\/"},"modified":"2024-03-24T15:13:57","modified_gmt":"2024-03-24T14:13:57","slug":"buy-limit","status":"publish","type":"glossar","link":"https:\/\/www.captrader.com\/en\/glossar\/buy-limit\/","title":{"rendered":"Buy Limit"},"content":{"rendered":"

Active traders often follow the strategy of buying a stock, ETF or other trading instrument after it has completed a price correction. The goal here is usually to get an entry at an attractive risk-reward ratio, which is not the case when entering a far advanced trend movement. Instead of watching the market and waiting for a correction to occur, a Buy Limit order can be used for this purpose. With a Buy Limit (also: Limit Buy) you can define a limit price at which you would like to buy the underlying. If the market falls to or below the limit price, your order will be executed automatically as long as it is guaranteed that your order can be executed at the previously defined limit or a better price. In this article you will learn what a buy limit order is, how it works and when its use makes sense.<\/p>\n\n\n\n

What is a Buy Limit Order?<\/h3>\n\n\n\n

A buy limit order is an order placed with the broker to buy a financial instrument at a limit price defined by you or at a more favorable price. The order will only be executed if the price limit can be met.<\/p>\n\n\n\n

You define a maximum price at which you are willing to buy the underlying. In contrast to a stop order, a worse execution price or slippage to your disadvantage is not possible, because the limit order is not converted into a market order, but represents a \"hard limit\". In volatile markets or in the event of a price gap, it may even happen that you receive a better execution price. This is the case if the next tradable price (e.g. after a price gap) is below your limit price.<\/p>\n\n\n\n

If you choose a limit price above the current market price, this also represents the maximum purchase price you will accept. In liquid markets, this usually means that you get a better execution price and your order behaves like a market order.<\/p>\n\n\n\n

Example: Buy Limit Order Siemens Share<\/h3>\n\n\n\n

To explain the functionality and a possible purpose of a buy limit order, let's look at the Siemens share as an example, when it reached a new high point within the uptrend in January 2021.<\/p>\n\n\n\n

Imagine that the stock had been on your watch list and you were looking for a long entry. However, due to the far advanced trend movement, you did not want to buy immediately, but wait for a setback first.<\/p>\n\n\n\n

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In order not to miss the buying opportunity in the event of a price correction, the use of a limit buy order has offered itself at this point. Since the previous high point at approx. 110 euros per share should provide chart technical support in the event of a correction, you could have placed a limit order a few points above the support zone, for example.<\/p>\n\n\n\n

After the correction occurred, your buy order (Limit Buy) would have been executed automatically.<\/p>\n\n\n\n

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Create Buy Limit Order in TWS and Trading App<\/h3>\n\n\n\n

To create a Buy Limit Order in the Trader Workstation or in the CapTrader Trading App, select a buy order and then change the order type to \"LMT\" for a Limit Order. The detailed procedure is described in the article Limit Order.<\/p>","protected":false},"author":20,"featured_media":0,"template":"","class_list":["post-45244","glossar","type-glossar","status-publish","hentry"],"acf":{"blog_summary":"","blog_faq_schalter":"nein","faq_uberschrift":"","blog_faq_loop":null},"_links":{"self":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/glossar\/45244","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/glossar"}],"about":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/types\/glossar"}],"author":[{"embeddable":true,"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/users\/20"}],"wp:attachment":[{"href":"https:\/\/www.captrader.com\/en\/wp-json\/wp\/v2\/media?parent=45244"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}