How to Select a Limit Price

Selecting the best price when you are trading an asset involves setting a specific price at which you are willing to buy or sell it. The goal is to get the desired price, but it requires careful consideration of market conditions and your own trading strategy. Further, failure to select an appropriate price may result in your order not closing if there is no buyer or seller willing to accept your trade.

Steps to Select the Best Price for a Limit Order

Analyze the Market:

• Current Price: Check the current market price (also known as the index price) of the asset you want to trade. This gives you a baseline.

• Order Book: Examine the order book, which shows the prices and quantities of buy and sell orders currently placed on Rails. This can help you understand where most traders are placing their orders.

Set Your Desired Price:

• For Buying: Choose a price below the current market price. This means you are waiting for the price to drop to your set level before your order executes.

• For Selling: Choose a price above the current market price. Your order will only execute if the price rises to your set level.