What is a limit buy on Independent Reserve?

A limit buy order in the world of cryptocurrency trading refers to an instruction to purchase digital assets at or below a predetermined price per unit. This approach allows traders to set a maximum price they are willing to pay, ensuring they do not overpay for their desired coins or tokens.

The execution of a limit buy does not occur instantaneously, contrasting with market buy orders that are filled at the current market price. Instead, a limit buy remains active within the Order Book, waiting for a seller to match its terms.

The Order Book is a digital ledger that displays all buy and sell orders for a particular cryptocurrency, arranged by price and quantity. It serves as a marketplace where traders can interact and facilitate transactions.

When a sell order matches the price and conditions of a pending limit buy, the exchange executes the trade, and the respective coins or tokens are exchanged between the buyer and seller. This process continues until the limit buy is fully filled or cancelled.

The advantage of using a limit buy is that it gives traders control over the price they pay for their cryptocurrency investments. It also reduces the risk of impulsive decisions based on sudden market movements, as traders have already decided on their maximum acceptable price.