Limit orders let you buy or sell at a predetermined price. Here’s an example of limit orders in action.

Buy 100 TWTR, Limit = $25. $25 is the maximum you are prepared to pay for one share Sell 100 TWTR, Limit = $25. $25 is the minimum you are prepared to accept for one share

Let’s say you want to buy 100 Twitter shares, but think it’s overvalued at the moment. You can set a limit order to buy the shares when they reach a lower price. Now, you might be wrong and the shares never reach that low - which means the order will never be filled.