A limit order allows you to buy or sell a stock at the price you have set to buy/sell at the best price. In other words, Limit orders placed will be checked against the daily price range of that security. If the limit order is below the lower end of the daily price range or above the higher end of the daily price range, then such limit orders may be rejected by the system.
The advantage of placing a limit order is that you can place buy/sell order at the desired price. However, there is a chance that your order may not get traded if the price does not reach the market.
Example: If you place a buy limit order at Rs 100, you want to buy the stock from the exchange only at Rs 100 or lower. Similarly, if you place a sell limit order at Rs 105, you want to sell the stock at Rs 105 or higher.