How to use limit orders on Coinbase Pro?

Understanding Limit Orders on Coinbase Pro

A limit order on Coinbase Pro allows traders to buy or sell a cryptocurrency at a specific price or better. Unlike market orders, which execute immediately at the current market price, limit orders give users full control over the price they are willing to pay or accept. This is particularly useful in volatile markets, where timing and precision matter. When placing a limit order, the trade will only execute if the market reaches the specified price. If the price never reaches the limit, the order remains open until canceled or expires. This functionality is essential for traders who want to set entry or exit points without constantly monitoring the market.

Accessing the Coinbase Pro Trading Interface

To begin using limit orders, you must first access the Coinbase Pro platform. Navigate to pro.coinbase.com and log in to your account. If you're using the mobile app, ensure you're on the Pro version, not the standard Coinbase app. Once logged in, locate the trading pair you wish to trade—such as BTC-USD or ETH-EUR—by using the search bar or browsing the markets list. Clicking on a pair opens the advanced trading interface, which includes price charts, order books, and the order entry panel. This interface is where all limit order actions take place.

Setting Up a Buy Limit Order

To place a buy limit order, follow these steps in the trading interface:

• Select the 'Buy' tab in the order entry section.
• Choose 'Limit' as the order type instead of 'Market' or 'Stop.'
• Enter the specific price per unit of cryptocurrency at which you want to buy.
• Input the amount of cryptocurrency you wish to purchase, or use the 'USD' field to specify the total fiat value.
• Review the estimated fees and the total cost.
• Click 'Place Buy Order' to submit.

For example, if Bitcoin is trading at $30,000 but you want to buy at $29,500, enter $29,500 as your limit price. The order will only execute if the market drops to that level. Until then, it appears in the order book under 'Open Orders.'

Creating a Sell Limit Order

A sell limit order works similarly but is used to sell at a price higher than the current market value. This is ideal for locking in profits at a desired price point.

• Click the 'Sell' tab in the order form.
• Confirm that 'Limit' is selected as the order type.
• Enter your desired sell price, which should be above the current market price.
• Specify the amount of cryptocurrency you want to sell.
• Double-check the total value and associated fees.
• Click 'Place Sell Order' to confirm.

Suppose you own Ethereum currently priced at $2,000 and want to sell when it hits $2,100. Setting a limit sell order at $2,100 ensures your assets are sold only if the price reaches that target. This prevents premature selling due to sudden price spikes that don’t last.

Managing Open and Filled Limit Orders

After placing a limit order, it appears in the 'Open Orders' section, typically located below the trading chart. Here, you can monitor the status of your order. If market conditions meet your specified price, the order will execute partially or fully. Partial fills occur when only a portion of your order matches with available liquidity at your limit price. You can view filled orders in the 'Orders' or 'Trade History' tab. To cancel an unfilled limit order:

• Go to the 'Orders' section.
• Locate your open limit order.
• Click the 'Cancel' button next to it.

Canceled orders are moved to the 'Canceled Orders' list. It’s important to regularly review open orders, especially during fast-moving markets, to avoid unintended executions or missed opportunities.

Adjusting Order Settings and Using Post-Only Options

Coinbase Pro offers advanced options for limit orders, including the 'Post Only' feature. When enabled, this setting ensures your order will only be placed as a maker order, meaning it adds liquidity to the market rather than removing it. If your limit order would immediately match with an existing order, it will be canceled instead of executing, avoiding taker fees. To use this:

• Enable the 'Post Only' checkbox in the order entry panel.
• Set your limit price and amount.
• Place the order.

This is beneficial for traders aiming to reduce trading costs, as maker fees on Coinbase Pro are typically lower than taker fees. Be aware that if the market moves quickly, your post-only limit order may not execute at all.

Frequently Asked Questions

What happens if my limit order doesn’t get filled?If the market price never reaches your specified limit price, the order will remain open indefinitely unless you set an expiration or cancel it manually. You can adjust the price or cancel the order at any time.

Can I place a limit order outside the current bid-ask spread?Yes. A buy limit order can be placed below the current ask price, and a sell limit order can be placed above the current bid price. However, execution depends on market movement reaching your specified level.

Are there fees for unfilled limit orders?No. Coinbase Pro does not charge fees for placing or canceling unfilled limit orders. Fees are only applied when an order is successfully executed.

How do I know if my limit order was a maker or taker?After execution, check the 'Orders' history. Filled orders are labeled as 'Maker' or 'Taker.' Maker orders contribute to market liquidity and usually have lower fees.