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What happens when a lot of traders place limit orders at the same price?
A few things can happen..
But first, what’s a LMT ORDER?
A limit order is a passive order waiting to be filled to buy or sell a security with a restriction.
For example, I’m putting my house up for sale for $1M minimum and I’m not willing to compromise on the price.
The deal will not be completed until a buyer decides to accept my offer.
This is a SELL LIMIT ORDER, or in other words, a passive asking price.
So back to our question.. What can happen when a lot of traders place limit orders at the same price?

A large number of buy limit orders can act as a support level, preventing the price from dropping below it, and a large number of sell limit orders can act as a resistance level.
It can also indicate potential interest in specific prices, influencing market sentiment and participant decisions.

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