Key Takeaways
Limit orders enable precise trade execution, letting traders control entry and exit prices. They are ideal when liquidity is low or price targets are specific.
Limit orders can help avoid slippage and reduce fees, but carry the risk of not executing if the market doesn’t reach the set price.
Understanding how to implement limit orders via API enables more control and automation for experienced traders.
Introduction
Limit orders are a key trading instrument that allows users to define the maximum or minimum price at which they are willing to buy or sell an asset. This provides greater control over execution prices, making limit orders especially useful for traders who prioritize price precision over execution speed.
Limit orders are available across Spot, Futures, and Margin markets on Binance, each with unique characteristics and requirements. This article will explain how limit orders work, how to place them using the Binance API, and best practices to ensure successful and strategic execution.
For more information on limit orders, refer to the article available What Is a limit order?.
How Limit Orders Work on Binance API
To prepare a limit order on Binance, the user will need to fill the following parameters:
symbol: The trading pair (e.g., BTCUSDT)
side: The two different order sides, BUY or SELL
type: Order type, which in our case is LIMIT
price: The specific price at which you want to buy or sell
quantity: Amount of base asset to trade
timeInForce: Order validity instruction (e.g., GTC - Good ‘Til Canceled, IOC - Immediate or Cancel, FOK - Fill or Kill)
Unlike market orders, limit orders are not executed immediately. They are added to the order book and wait until the market reaches the specified price. Limit orders can optionally include the icebergQty parameter (when available) to split a large order into visible and hidden portions, reducing market impact and increasing trading efficiency. After one is filled, the system will automatically place another until all the icebergs have been filled. Changing the order type is not mandatory.
Limit orders across spot, futures, and margin trading
Spot Trading: Limit orders provide price control by allowing traders to specify exactly how much they’re willing to pay or accept. They remain open until filled or canceled.
Futures Trading: Traders use limit orders to buy at a maximum price or sell at a minimum price, particularly in low-liquidity conditions or outside regular hours. They help minimize taker fees and maximize profit when market prices are far from desired levels. Execution is not guaranteed.
Margin Trading: In Margin mode, limit orders can be placed with borrowed funds, increasing exposure and potential returns—but also amplifying risks like liquidation if positions are not actively managed.
Order matching and execution
Limit orders are queued in the order book according to price and time priority. When a market participant places a taker order that matches his limit order’s price, the order will be executed (fully or partially) depending on the available volume. Until matched, the limit order remains open and can be canceled at any time via the API.
Slippage considerations
Limit orders help traders avoid slippage by allowing them to set a specific price. However, this control comes with the risk that the order may not be executed:
If the market price doesn't reach the specified limit, the order remains unfilled.
Navigating this balance between price precision and the likelihood of execution is a key consideration when using limit orders.
Order rejections and constraints
Limit orders may be rejected for several reasons:
FILTER_FAILURE: The order doesn't meet trading rules (e.g., minimum notional value, tick size).
INSUFFICIENT_BALANCE: The account lacks enough funds to support the trade.
PRICE_FILTER Violation: The price doesn’t conform to the tick size for the trading pair.
To avoid these errors and retrieve correct trading rules, traders can use the endpoint GET /api/v3/exchangeInfo. Prices and quantities should always be formatted according to the trading pair’s tickSize and stepSize to avoid FILTER_FAILURE errors.
Example: Placing a Limit Order Using Binance API
In this example, we will place a sell limit order on BNBUSDT:
from binance_sdk_spot.spot import Spot, ConfigurationRestAPI
configuration_rest_api = ConfigurationRestAPI(
api_key="YOUR_API_KEY",
private_key="YOUR_ED25519_PRIVATE_KEY",
base_url="https://api.binance.com"
)
params = {
"symbol": "BNBUSDT",
"side": "SELL",
"type": "LIMIT",
"time_in_force": "GTC",
"quantity": 1,
"price": 570,
}
client = Spot(config_rest_api=configuration_rest_api)
response = client.rest_api.new_order(**params)
print(response.data())This order is added to the book and will execute only if the market price rises to $570.
Retrieving Limit Order Execution History
After placing a limit order, you can track its status and outcomes using:
/allOrders: Returns all orders with their current status (e.g., NEW, PARTIALLY_FILLED, FILLED, CANCELED).
/myTrades: Provides trade-level execution data such as:
Executed quantity
Price
Time of execution
Commission fees
This information helps evaluate strategy performance and market behavior.
Advanced API Considerations
To maximize the utility of limit orders, consider the following enhancements:
Using WebSocket Streams: Get real-time updates on order status, reducing the need for polling.
Managing Partial Fills: Monitor executedQty to determine whether additional orders are needed to meet trade targets.
Combining with Stop Orders: Use limit orders in conjunction with Stop-Limit or Take-Profit orders for greater control over both entry and exit points.
Handling Order Expiry: Use timeInForce options like IOC or FOK to automate cancellation conditions for unfilled orders.
Closing Thoughts
Limit orders are a powerful tool for traders seeking precision and control in trade execution. Unlike market orders, they help avoid slippage but may not execute immediately. When used effectively—especially in conjunction with stop orders and robust monitoring—they allow traders to define and manage risk while pursuing strategic entry or exit points.
Understanding how to place, monitor, and troubleshoot limit orders via the Binance API is essential for any trader aiming to automate or fine-tune their trading strategy. To further strengthen trade management, combining limit orders with Take Profit and Stop Loss mechanisms can provide added protection and clarity—these will be covered in upcoming articles.
Further Reading
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