Limit order

A limit order is an order to buy or sell a currency at a specific pre-set price. A buy limit order can only be filled at the limit price or lower, and a sell limit order can only be filled at the limit price or higher. When you place a market order, you can't control the price at which your order will be filled as, depending on the volatility of the market, the price can change suddenly and your order could get filled at a different price. (That's called 'slippage'.)

To avoid buying or selling a stock at a price higher or lower than you wanted, you need to place a limit order rather than a market order.

Let's say the current forex rate of EUR/JPY is 135.46 / 135.50 (bid/ask). Say you want to jump in with a long position (i.e. to buy) when the price reaches 136.20 There's two things you can do: (1) you can lie down in your trench and wait for the price to get to 136.20 and put in a market order, or (2) you can just set a buy limit order to be executed at 136.20

Forex Limit Orders

Remember that your limit order may not get filled on the same day or even the same week if the market doesn't reach the limit order execution price. If you forget to delete your limit order, some time later (maybe even few weeks or months later) you'll wonder why you a position was opened in a currency pair you don't trade anymore.