No doubt, rejection of a limit order is an awkward situation for a trader. But if it happens frequently, it makes a trader disappointed and fed up with trading.
Have you ever thought about why it occurs again and again?
Are you only the victim who faces it?
This post will solve all your queries. Just read and follow….
The most provoking thought of a trader is why did not my limit order executed?
Several reasons block your limit orders. It happens mostly when you have limited volume, bounded support, rejected deposits, insecure market conditions, and submit orders in extended hours. It may also happen at large orders that have low-security volume.
If you do not have enough shares at a certain price, you can not fulfill your order.
This informative post will help you to understand it in a better way. So, be ready and start reading without skipping any point…
What Is Limit Order
As a trader, you must be aware of Limit Orders in forex trading. Do you?
If not, let me tell you!
A limit order refers to an order that helps buy or sell a currency at a suitable price. You can only execute your buy limit order at a specific or low price. On the other hand, if you are going to sell limit orders, they can be executed at a higher or finite price.
Do you know how you can fulfill your limit order?
It can only be done when your price gets access at the market price. Often a trader has to face the situation when his limit orders may be rejected because they fail to cover risk checks.
There is another point regarding limit order rejections. According to immediate executions, if you set your orders, that means your orders will not be accepted, and the broker will reject your order.
You can control execution prices with the help of limited orders. It can also save you from large downside losses.
Top Reasons That Will Not Execute Your Orders
What thought comes to your mind after the rejection of your limit orders? Obviously, you want to know the reasons behind it.
Despite it, you will not be able to control the cancellation of orders.
Generally, when you place an order, there is no guarantee of its fulfillment. There are several reasons behind the expiration of orders.
I have listed some of them so that you can find the solution to complete your order easily.
Let’s have a look at them:
The main reason that stops your orders from execution is the insufficient volume of price.
If you have not enough shares of limited numbers, your order will never be fulfilled. That means you must set up a limited price before placing an order.
Such situations frequently occur when traders place their orders at low-security volume.
Generally, orders will terminate at the end of the trading day because they may not meet the limit price or, sometimes, don’t exceed it.
Remember that a buyer and a seller are necessary for trading on both sides for the execution of orders.
Increasing Trading Hours
The time period of trading in the market plays an important role in filling your order. Be careful while placing orders and avoided the worst time of trading.
If you find some extra hours for trading, what do you do?
Are you going to place your limit orders? If yes, then stop and wait!
It is not suitable…
It is often seen that orders may not be fulfilled that are placed in extended hours. The reason is that there is low volume and spreads get high in comparison to usual trading time periods.
Another reason that stops you from placing orders during such hours is that many stocks don’t have enough exchangeable orders during these hours. That’s why your limit orders may not be executed.
Conditions of Open Market
It is another hindrance in the way of your limit order. How?
Let me explain!
To become a successful trader, you must act like a market maker. It would be best if you were updated with market trends. If you don’t, then there is no place for you…
A market maker always starts trading with the open market. If he plays his later, it means he loses the chance of his order being accepted. Yes, it’s true… You must be active with the conditions of the market.
Be aware of the open market affairs and take steps immediately. This is only how you can execute your limit orders without any delay.
But if you see the validity of the trading market high, your order may not be filled immediately, despite the open market.
Another point to understand is that never start trading until the basic stock reaches primary exchange listing.
So, if you want to avoid delays in limit orders, take steps according to the state of the trading market when it is open.
Bounded support at effecting locality
Limited support also prevents your orders from execution. As you know, the trading market sets a specific price and quantity for limited orders.
If your orders cross that limited price, it means there is no chance to accept your order.
Effecting localities will not support your order, and it will be rejected without any delay. That’s why when any broker may not hold stocks up, they take a step forward and leave your pending order unfulfilled.
Rejected Deposit by Bank
Your trading bank account has 5 working days in which it can accept or reject your payment for any reason.
That’s why, when you get new deposit funds after trading, your bank may send them back.
In this case, if you place your limit order, it may not be executed due to these rejected funds. To submit an order, your funds must be available for trading.
Once you receive a rejection notice, any limit order will be canceled. If you want to check your bank account activity, you have to see your returned bank funds.
After checking them, you will be able to submit your limit order without any fear of rejection.
Insecure Market Conditions
Market conditions must be established for the fulfillment of orders. Your trading is only stable if the market goes in your favor.
For example, the enormous flow of price and lack of sale or purchase is the conditions that become a great obstacle in the way of your orders. In such situations, your limit orders will not be fulfilled.
So, trading market conditions should be secure for your order, and you will easily fill up your order.
What happens if a limit order is not executed?
It is not common that your limit order will always execute. It happens only if your market price never reaches the limit price. In this case, your order won’t execute.
How long does a limit order take?
Typically, you can set your limit order to execute up to three months after entering them. Sometimes, your broker will fill your order at the best price. It means you don’t have any need to watch to get the price.
Can you cancel a limit order?
Investors can cancel a limit or stock order for any reason. Many orders may stand for hours or days, depending on the price movement; such orders can be canceled without any difficulty.
Finally, you are now fully aware of the reasons why your limit order was not executed.
The above-mentioned tips will prove a helpline for traders to fulfill their orders.
It is necessary to avoid the rejection of orders to be updated with the market. Don’t be in a hurry while placing an order. Just observe the trading conditions minutely and then submit your order.
If you find this content informative, don’t forget to share it with a friend who is worried about his limit orders.