Limit order

Patience is the product here. Your order joins the queue at your chosen level and sits there, visible to everyone, until someone trades against it or you cancel. On Kraken Pro that patience is also worth 0.15 percentage points, the gap between its 0.25 percent maker rate and its 0.40 percent taker rate.

How it works

A limit order carries two numbers: how much, and the price beyond which you refuse.

A buy limit fills at your price or better; a sell limit fills at your price or better in the other direction. If nothing on the opposite side of the book meets your terms, the order rests, and the exchange records it as available liquidity for someone else to hit. Orders at the same level are normally worked in arrival sequence, so an order placed earlier at 99,500 fills before one placed later at 99,500.

Because a resting order supplies liquidity rather than consuming it, it earns the maker rate, which is the cheaper side of every published fee schedule. There is a wrinkle: a limit order priced aggressively enough to cross the spread executes instantly against existing offers and is charged as a taker. A post-only flag prevents that by cancelling the order rather than letting it cross, which is how traders make sure they actually get the maker rate.

Partial fills are normal. If only part of your size can be matched at your price, that part trades and the remainder stays in the book, so one order can become several fills on several timestamps, each with its own cost for your records.

Time-in-force settings decide the rest. Good-till-cancelled leaves the order alive until you kill it, which on some venues means weeks. Immediate-or-cancel takes whatever is available right now and discards the rest. Fill-or-kill demands the whole size at once or nothing.

Why this matters when you buy bitcoin

Two savings are on offer, and only one of them is reliable.

The reliable one is the fee. On a 10,000 dollar purchase, Kraken Pro's maker rate costs 25 dollars where the taker rate costs 40. Do that monthly and the difference is 180 dollars a year for clicking a different order type. Binance's spot schedule starts at 0.1 percent on both sides, so the saving there is zero, which is a good reminder to read the actual fee table of the venue you use rather than the general advice.

The unreliable one is the entry price, and this is where limit orders quietly hurt long term buyers. Setting a bid a few percent below the market feels prudent. In a rising market it means you own nothing while the price leaves: bitcoin spent much of 2022 below 20,000 dollars and first traded above 100,000 on December 4, 2024, and every unfilled bid along that path was a decision to hold cash instead. A missed purchase has no line in your fee summary, which is exactly why it goes unnoticed.

A practical middle position: use limit orders for the fee saving, not for market timing. Place the order at or very near the current offer with post-only enabled, accept that it may take minutes rather than seconds, and cancel and re-place if the market moves away. You capture the maker rate without betting your accumulation plan on a level you invented.

One more benefit is worth naming. A resting order is a decision made calmly in advance, which is a materially different act from pressing buy during a green candle or sell during a red one.

The bid that never filled

A concrete failure teaches this better than a rule.

Say bitcoin trades at 100,000 and you decide 97,000 is a fairer entry for a 5,000 dollar purchase, so you rest the bid and wait. Three outcomes exist. The market dips to 96,800, your order fills at 97,000, and you saved 150 dollars against buying at once. The market never trades below 98,000, your bid sits untouched for a month, and you own nothing. Or the market falls to 90,000, your order fills on the way down, and you now hold a position bought during exactly the conditions that made you want to wait.

Notice that two of the three outcomes have nothing to do with fees. Whether the strategy paid depends entirely on a price path you cannot see in advance, while the 15 basis point maker saving was available in every scenario. That asymmetry is the argument for using limit orders as a cost tool and dollar-cost averaging as a timing tool.

Limit order vs stop-loss order

A limit order is visible in the book and waits to be filled at your price; a stop-loss order is invisible and waits for a trigger before it does anything. The limit is a standing offer that supplies liquidity and cannot execute worse than you specified. The stop is dormant until the market reaches your trigger level, and then it typically fires as a market order that takes whatever is available, which can be far below the level you set. One caps your price, the other caps nothing.