Compare Binance Limit Orders vs Market Orders and how to use them best effectively

TutorialsJanuary 13, 2022

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When trading on Binance, users can see different types of orders. However, not everyone knows the difference and how to use these commands. The following article distinguishes between the most popular order types, Binance Limit vs Market. The next article will help determine between Binance Limit vs Market orders and use these two orders for the best trading efficiency.

What are Market vs Limit orders used for?

On Binance, there are two types of orders to complete a transaction: BUY order for one person to place an order to buy a cryptocurrency and SELL order for another person to place an order to sell the same amount of other cryptocurrencies. If one has previously used a BUY order, Trade needs to use a SELL order to exit. And vice versa, if one has entered a SELL order before, it is necessary to use the BUY order to leave the Trade.

Both BUY and SELL orders have order options: Market, Limit, Stop-limit. These orders allow users to choose different prices and opening times.

  • Binance Market orders allow users to open orders at the active market price.
  • Binance Limit orders allow users to open orders at a preset price.
  • The Binance stop-limit order allows the user to stop the order when the price reaches a preset price.

Stop – Limit Binance orders are often used to stop loss or take profit orders. Meanwhile, Binance Market and Limit orders are often used to open orders, making it difficult for many new traders to distinguish between the two.

What is a Binance Market Order?

A Binance Market order is an order type that allows traders to buy or sell a cryptocurrency instantly at the best price. Market orders are executed immediately, so the user incurs Taker fees. The BUY Market order is matched with the SELL Limit order on the order book to complete a transaction. Suppose a BUY Market order in volume exceeds a pending sell order of a smaller volume. In that case, the remaining buy order is executed with the following awaiting sell order on the order book. This phenomenon is called slippage.

How to open a Market order on Binance Spot

To open a Market order on Binance, users need to log in to their Binance account. If you don’t have an account, register using the link below:

* See more: The complete guide Binance from a to z

Select Trade and click Classic or Advance (depending on which interface the user prefers to use. The tutorial is on the Classic interface. In the trading window, select Market.

Binance Limit vs Market - How to open a Market order on Binance Spot

Binance’s trading window shows both Buy and Sell orders simultaneously. Depending on the trader who wants to execute the order, he will fill in the volume information in that window and click Buy or Sell. Transaction will be complete immediately.

The volume section has two options: By Total or Amount to select the unit to display the transaction. The user who prefers to place orders according to the trading order can choose that unit. In addition, the bottom also has a horizontal bar to select the volume of transactions made according to the percentage of assets the user has.

What is a Binance Limit Order?

A Binance Limit is an order to set the price a trader wants to execute. The Trade is conducted when the market price reaches the price set at the limit order, or there is a better price. The market price may never get the limit order’s fixed price, so these trades may never be executed. The transaction fee of a Limit order is the taker fee, so it is usually lower than the transaction fee of a Market order.

The Binance may not execute Limit orders due to insufficient Market order volume. Limit orders are completed in chronological order. If multiple orders are placed at the same price, the order placed first will be executed first. If the cost of the pending order is not suitable, the pending order may go unfilled forever and may affect the trader’s investment results.

How to open a Limit order on Binance Spot

Similar to opening a Market order, users need to log in to their Binance account, select Trade and click Classic and select Limit.

Binance Limit vs Market- ow to open a Limit order on Binance Spot
  • Price: Is the price the user wants to make the transaction.
  • Amount: is the volume of transactions you want to make.

After completing the transaction information, click Buy or Sell according to the trading strategy. The pending order that has just been placed is displayed in the Open Orders section.

Compare Binance Limit Orders vs Market Orders

Market orders are executed when a trader needs to enter the Market immediately instead of waiting for a specific price. Market orders are executed when a trader may not be interested in a special price or missed out when their Limit order was not completed, and they need to make up for it by running a trade right away.

Market orders often have higher transaction fees or slippage when pending sell orders are usually placed at a lower price. So traders use it only in critical situations to avoid losing profits.
Limit orders are often used when a trader wants to execute a trade at a possible price that is better than the current one, which may happen in the future. The trader can set the pending price in a Limit order lower or higher than the current price to expect the price to fall or rise higher in the future. Limit orders on Binance can also be set according to a percentage of the trader’s available cryptocurrency volume, helping the trader manage trades more efficiently and proactively.

Conclusion: Binance Limit vs Market orders

Limit and Market orders are the two most frequently used order types on Binance. However, as analyzed above, Limit orders can be more beneficial to users regarding transaction fees and order execution prices. However, if the expected price does not match, the Limit order may never be executed, affecting the trader’s investment opportunities. Therefore, users should consider and use appropriate Binance Limit and Market orders to get the best trading performance.

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