Limit order — An order to buy or sell at a specified price or better, which will not fill at a worse price.
How limit order works in prop trading
A limit order sets a price boundary: a buy limit fills at your price or lower, a sell limit at your price or higher. It rests in the order book until filled or cancelled, and it can be skipped entirely if the market trades through without filling your size — price certainty bought with fill uncertainty.
On a prop account limits are the default choice for entries, because they remove slippage from the side of the trade you control. Two caveats. Being filled means someone traded against you, which in a fast market often means the move continued through your price. And on a simulated funded account, limit fills may be modelled more generously than a live exchange queue would deliver.
Key points
- Fills at your price or better, or does not fill at all.
- Removes entry slippage, which is meaningful against a tight drawdown allowance.
- A limit order can be passed over even when the market touches your price, depending on queue position.
- Simulated funded environments may model limit fills more favourably than a live queue.
Also known as
- resting limit
- limit
- passive order
Frequently asked questions
Should I use limit or market orders on a prop account?
Limits for entries where a missed fill is acceptable, since they remove slippage from the trade. Market or stop orders for exits where getting out matters more than the price. On a tight drawdown, the ticks saved on entry add up quickly.
Why did my limit order not fill?
Usually queue position — the market touched your price but the resting orders ahead of yours absorbed all the volume before it reached you. It can also happen if the price traded through in a single fast print.
Limit order is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.