A limit order is the opposite of a stop order. It is an order to
enter or exit the market at a price that is better for the trader
than the price currently offered.
If we buy 5 lots of the mini Dow Jones futures contract at a
price of 12000 and leave a limit order at a price of 12050 we will
exit the initial trade if the market rises in value to this target
price resulting in a profit of 50 points (or $1250, 50 points
multiplied by 5 lots which is equivalent to $25 per point).
We can also place a limit order to enter a new position. In the
Dow Jones example above we can choose to buy 5 lots if the market
trades at a price of 11950. A new trade will not be established
until the market trades at this level.