Say the price is 34/35 and you put a limit order to sell at 31 then your shares will sell at 34 (provided there is liquidity) or at any available bid down to 31 (but no lower!).
You may be thinking of a stop loss which means if the price goes down to 31 (from 34) it will sell at 31 (although stops aren't always guaranteed)
It's unclear what it is you're trying to do, or why you think you need a limit order to sell at a lower price than the market price. Limit orders are used to get "market price or better," not lower.
With the stock trading at 35, you might set a limit order at 35.50 or 36 or 40, etc. to try and get a better price than market. It would automatically sell when your price is reached.
If you want protection from a decline in price, then you would use a stop loss order. Most traders don't want a loss of more than 10%, so you might place a stop loss order at 31.50 (35 minus 3.5). The stop would automatically execute if price declined to 31.50 and you would be out with a small loss (if you paid 35). This presumes good liquidity. Don't know what that is? Define it, learn it. The "a priori" of trading is liquidity and risk.
Go back to the definitions to clear up any confusion. This is basic foundational stuff that you must know backwards and forward, so you can execute without even thinking so you don't make mistakes. Even then, it is easy to sell when you meant to buy, for example.
There are only a few basic order types. The details are in the definitions. Better yet, read a good beginner book like Investing for Dummies to see how things are integrated and used and applied with real examples. It's difficult to gain in-depth knowledge from a few web snippets and definitions.
Definition of 'Stop-Loss Order'
http://www.investopedia.com/terms/s/stop...
http://www.investopedia.com/forex/news/d...
http://www.investopedia.com/articles/sto...
1. If share price does not drop below $34 wit will not be sold at $31 as $31 price is not available on the market.
2. If your share price drops to $31 or below your shares will be sod at $31or at market price respectfully.
If I place a limit order when I sell my shares and say the market is currently $35.00 and I have a limit order set at $31.00 does that mean that if my shares sale they will sale at $31.00 regardless of the current price, even if the share price never drops below $34.00, would my shares still sale for $31.00 anyways just because I said that is what it will take to buy them? Or is the $31.00 limit order just a safety net so that the shares will not sell if the price was to drop any lower before the transaction is complete? Im a bit foggy on that.
Thankyou very much.
