Crypto Trading 101: How to Read an Exchange Order Book
It takes two to tango in the world of crypto trading, where a dynamic relationship between buyers and sellers is always on display in something called an order book. A tool that visualizes a real-time list of outstanding orders for a particular asset, order books represent the interests of buyers and sellers, offering a window into supply and demand. But while all order books serve the same purpose, their appearance can differ slightly among exchanges. That said, they are all built with the same features and functions. Examples from Coinbase Pro, Binance, Bitfinex and Kraken are shown below: To become comfortable reading order books, it is essential to understand four main concepts: bid, ask, amount and price. This information is displayed on two sides of the order book known as the buy-side and sell-side. For the purposes of this explanation, we will be using the BTC/USD order book from one
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