# How Do Limit Orders Work?

A friend recently asked about order types, so let's break this down in detail for everyone.

There are two main types of orders:
- Market Order: Executes immediately at the current market price.
- Limit Order: Only executes when the price reaches the level you set.

Here's how limit orders work:
- Buy Limit - Set below the current price. You expect the price to drop first, then rebound.
- Sell Limit - Set above the current price. You expect the price to rise first, then pull back.

Use them to plan your trades, and you won't need to stare at the charts all day anymore.

Limit orders have another major advantage: their trading fees are significantly cheaper than market orders!