A limit order is an instruction to buy or sell a stock only at a specific price or better. A buy limit fills at your price or lower; a sell limit fills at your price or higher. It gives you price control, but the trade-off is that it may never fill if the market doesn't reach your price.
You set a limit buy for AAPL at $180. If AAPL is trading at $184, your order waits, it only fills at $180 or better. If the price dips to $180, you get filled. If AAPL never falls that far, the order simply never executes and you buy nothing. Compare that with a market order, which would buy right away at $184.
A limit order hands you control over price, which matters most when a stock is jumpy or the spread is wide and a plain market order might fill somewhere you didn't want. The catch is that control comes with uncertainty, since the order only fills if the market reaches your price, and it can sit unfilled while the move happens without you. Learning when that trade-off is worth it takes reps, and a paper simulator lets you place limits, watch which ones fill, and see which ones the market simply leaves behind.
Setting the price too far away. A limit priced well off the current market can feel safe but often never fills, so you end up watching the trade happen without you in it.
Forgetting it might not fill at all. Unlike a market order, a limit order is a maybe. If the price never touches your level, nothing executes and you're left holding nothing.
Ignoring the time in force. A limit set for the day expires at the close, while a longer setting keeps working. Beginners often lose track of whether an old order is still live.
A market order fills right away at whatever price is available, while a limit order only fills at your set price or better. One prioritizes speed, the other prioritizes price.
The market never reached your limit price, so the order kept waiting. Buy limits fill at your price or lower and sell limits at your price or higher, and if the price doesn't get there, nothing executes.
Yes. A buy limit can fill below your price and a sell limit above it when the market is there, since the rule is your price or better. You can test this on a paper simulator.
Last updated: July 2026
Educational only. Not investment advice. JagSim is a simulator, not a broker.