An order book is a tool that displays a list of current buy and sell orders for assets on an exchange in real time. The order book shows which orders have been placed by market participants, indicating the prices and volumes at which they are willing to buy or sell assets.
The order book is divided into two parts:
• Bids: These are buy orders. This section shows the prices at which market participants are willing to buy assets. The highest bid price is typically at the top of the order book.
• Asks: These are sell orders. This section shows the prices at which sellers are willing to sell their assets. The lowest ask price is at the top.
Key Elements of an Order Book:
• Price: The price at which market participants are willing to buy or sell an asset.
• Volume: The quantity of assets that participants are willing to buy or sell at the specified price.
• Spread: The difference between the best bid price and the best ask price. The spread is an indicator of market liquidity. The smaller the spread, the more liquid the market.
When I first started with crypto, I remember it was difficult for me to understand how this worked. Maybe this will help some of the newcomers. Show Less
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