A limit order is a type of order that can be used in forex trading to help ensure level entry accuracy. This order will instruct a broker to buy or sell a currency at a specific price level or better. The limit order can be used to open new positions or to close existing positions.
For example, a limit order can be used to open a long position in EUR/USD at a price of 1.2050. The order will be filled at the specified price or better. This means that if the market price is lower than 1.2050, the order will be filled at the lower price. This helps ensure that you enter the position at the desired level and not any higher.
A limit order can also be used to close an open position. For example, if you have a long position in EUR/USD at a price of 1.2050 and you want to close the position at a price of 1.2000, then you can use a limit order to close the position. The order will be filled at the specified price or better. This helps ensure that you close the position at the desired level and not any lower.