A limit order to buy is placed below the current market price. A limit order to sell is placed above the current market price. A limit order can be placed as a day order or an open order.
There is no guarantee that your order will be executed when you place a limit order. First of all, the price may never reach your limit price. Secondly, a market could trade at your limit price, but your order does not get executed, because there may be other orders placed ahead of you at the same price and were executed before you. The market basically has to trade through your price to almost guarantee your order is executed.
Limit orders work well for patient commodity futures traders. Often traders want to buy the market at a better price, so they will wait for price to come to them. Also, once you are in a trade, you may have a designated price target where you want to take profits. Limit orders are perfect for that situation.
