How it works
You submit the order with an explicit price condition. The exchange places it in the order book where it sits until the market reaches your price level. If the market moves toward your limit, the order may fill partially or fully. If it never reaches your level, the order expires unfilled at session end or remains pending until you cancel.
Example
EUR/USD trades at 1.0856. You think 1.0820 is a better entry. You submit a buy-limit at 1.0820. The order sits in the book; the market may or may not come down. If price drops to 1.0820 and there are sellers, you fill at 1.0820 or better (1.0819, 1.0818). If price never touches 1.0820, you do not own EUR/USD that day. The trade-off is explicit.
Why it matters
Limit orders are right when you have a defined entry level and patience to wait: pullback entries, mean-reversion levels, accumulation at value zones. They are wrong when momentum is in your favour and waiting risks missing the trade entirely. They are also the only sensible choice on large positions in thin liquidity, where a market order would walk the book.
