What does a Buy Limit order mean to a forex trader?

A Buy Limit order is basically you telling your trading software to buy at a particular price or better. Buy limit orders are used when you anticipate the price is going to fall so you must set it below the current market price (and not above)

There are times when price falls so fast that the price could gap through your specified price and fall even lower. if that happens, the Buy Limit order will be triggered at the next available lower price which will be beneficial to you.

Unlike Buy Stop orders that only get triggered at a specific price, a Buy Limit order will also get triggered even if price jumps/gaps over your specified price and falls lower.

So to recap, remember these points:

1. A Buy Limit order must be set below the current market price

2. You set a Buy Limit order when you expect that price is going to start falling

3. If for any reason, the price gaps past your specified price, do not worry; the buy limit order will be triggered at the next available price (usually lower than the one you specified initially)

Setup Procedure:

Setting a buy limit order is easy, if you use MetaTrader simply open the chart, go to the price you want, right click on the price, then select "Buy Limit". While right-clicking on the price ensure you place your cursor below the current candle.