Limit Order

A limit order sets the price at which you are willing to buy or sell. It fills only if the market reaches that price; otherwise it simply sits waiting.

The advantage is never filling at a price you did not want. That matters most in volatile or thinly traded stocks, where a market order can execute far above what you expected.

The drawback is that it may never fill. Bid 50 and watch the price turn at 50.10 and you miss the trade entirely. When you genuinely need the position, a limit order works against you.

Orders normally expire at the end of the day, so keeping one live means re-entering it. For long-term investors, setting a price in advance and waiting helps take emotion out of the decision. Setting the limit too far from the current price is much the same as not ordering at all, though. Choose a level the market can realistically reach.