Everyone shine here where you're trading and today we're going to go over what a limit order is. A limit order is an order type that allows the trader to buy or sell a stock at a specified price or better. With a buy limit order, you are setting a maximum price you're willing to pay while with the Suliman order you're setting the minimum price you're willing to sell it for. Limit orders are great because you get to control the prices you get in and out at, unlike a market order where you're going to buy or sell or whatever the market prices at that time, which could be a big difference from what you're expecting, especially if the stock is moving quickly.

Now the downside to a limit order is you aren't guaranteed a fill if the stock doesn't trade to your limit price. So for instance, if we wanted to buy shares of the Spy's here, they're currently trading at 240 251 but say we didn't want to buy them until they went to 240 240 down here. Now if we place our buy limit at this price price though, the shares of the spy would have to trade down to that limit price or lower for us to get an execution. The same goes for selling.

If we own shares of the spy then we want to sell them as say prices got up here to 240 275. They're going to have to trade up to that price or higher for us to execute that trade. Now one way you like to use limit orders is by placing what's called a marketable limit order. We use this method as a way to get into trades quickly without using a market order and this helps us avoid slippage.

especially want to talk to moving quickly. So the way this works is if you're looking to buy a stock, you would place the limit price above the ass by a few cents. We usually use a five cent offset. So for example, if you know we're looking at the spies asked here at two 4254, we replaced it at 240 259 as a marketable limit order and this helps us get into the trade immediately and at the same time control the prices we would pay for shares.

You can also do this with selling by placing your limit order below the bed. This is a great way for getting down trades quickly and controlling your prices at the same time. So the main benefit to remember with limit orders is your ability to control the prices you buy or sell a stock at. And that's really important for day traders when every cent counts.

So that's limit orders. And if any of you have questions, leave us a message in the comments below. See you guys next time! Oh hey, I didn't see you there Why? I Was just working on the dream board for my next home run trade. Hopefully it comes soon.

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