Good every professor (@yousafharoonkhan) and my colleague student, I'm very glad to be among your student, Your lecture has been very insightful. You have really dealt well in this lecture. Your demonstration has really helped me to understand this course. I therefore want to try my hands on the task given.
Question 1. # What is meant by order book and how crypto order book differs from our local market. explain with examples .
Response to question 1.
The order book is one of the basic thing any investor must understand before investing, Understanding the order book will make you trade for the right assets at a particular time frame. From the lecture it can be deduced that, order book is book that where all necessary assets available for trade are recorded or displayed with its prices. That is which particular assets is to buy and which one to sell. Crypto order book quite differs from our local market order book, because the crypto order book also allows you to sell as well, one place that make good use of order books are restaurants, hotels and so on. This entities only make available the prices of their services known to the customer and the customer has an option to choose from the list. Here the buyer don't have the opportunity to sell just the buyer but the crypto order book will allow the members to also trade. Anyone can open the order book and trade.
Question 2
Explain how to find order book in any exchange through screenshot and also describe every step with text and also explain the words that are given below.
- Pairs
- Support and Resistance
- Limit Order
- market order
Response
Crypto order book can be found on most exchange platforms like Binance, Huobi global, coinbase, kraken, bittrex and many others. I will use binance to find order book.
How to find Order book on Binance.
Now before one can locate order book on binance, you need to have an accounts with binance, you register either on the site or by downloading the app from play store or apple store.
After successfully registering, you then have to log in onto the platform.
A successful login
Now from here, you then click market and click, so after clicking, you will see a list of coins and from there you can identify the prices
Now from here,if you want to find order book of any coin, you then locate the search tab and search for the coin, I'm searching for CAKE just as in the screenshot below, now after identifying your coin, you then click on trade
screenshot2
screenshot3
Now after taken you should be able to find your order book.
- Pairs. Can be best explained as assets that can be traded for each other, In simple terms the difference that exists between 2 cryptocurrencies. Examples are Bitcoin/litecoin, CAKE/BNB, MATIC/BNB etc.
Support and Resistance.
This 2 concept are used to draw define the demand and supply in the crypto world. Support occurs when more investors are buying or demanding, it is believe that the downtrend of the coin is expected to pause due to number of people demanding for the coin. Resistance also means or comes when investors are selling more coins because they can earn profit due to uptrend of the coin.
Limit Order.
From the order book, we can see the limit order and just as the name suggest, you placed a particular coin at a limit either buy or sell so when the coin reaches that point where you placed the limit. This is solely done by you.Market Order
The market order unlike the limit order is where the investor buys or sell at the current market price. You just go ahead and based on the market price.
Question 3.
Explain the important future of order book with the help of screenshot. In the meantime, a screenshot of your exchange account verified profile should appear.
Response
My verified Binance accounts
So on the order book, the most important features we can find is the Buy Order and sell Order
Buy Order
Under the buy order, we have
- Limit
- Market
- Stop Limit
With the buy order this is where you can trade your coins for another coins, You can choose to select the limit you want to buy a particular coin or You can buy at the Market price, that is buying at the current price of the coin. Here the investors only buys the coin when they see a fall in the price of the coin. And with stop Limit, The investors will themselves set prices at which they want to buy that Particular coin, Lets say I want to BUY CAKE at 2.00 price, then I will set my limit so, when the prices gets to the limit, the system makes the trading for me.
Sell Order just as how the buy order section works, here we are rather selling and we have the opportunity to sell at a limit or at the market price or we can set a limit just as the buy order section,
Question 4
How to place Buy and Sell orders in Stop-limit trade and OCO ,? explain through screenshots with verified exchange account. you can use any verified exchange account.(Answer must be written in own words)
#Response
How to place Buy and sell Orders in Stop Limit Trade and OCO
So with the same process used in finding the order book, we log in just as we did in finding the order book, Now at the order book page, we are coming to demonstrate how to buy and sell in stop-limit trade and Oco.
Now we will have our order book page where we trading is done
Now our concentrations are rather on stop-limit that is where the arrow is pointing at.
At we are coming to determine for ourselves where is applicable to buy. So at the buy column, we set for ourselves the price of the coin we want to trade, For the example purpose, So we are comparing CAKE/BNB.
Now from the screenshot, you can see the buy limit has been set to just 1.00. So you go ahead and click on buy, just as pointed on the screenshot.
You do same procedure for Sell, You set your sell order and you click on sell.
Sell Stop limit
Now With ICO
ICO means
You click on sell Cake.
Question 5
How order book help in trading to gain profit and protect from loss? share technical view point, that help to explore the answer (answer should be written in own words that show your experience and understanding)
The introduction of order book has really helped in the facilitation of their decisions in trading. It gives or tell the investors the actual time is advisable to trade.
Aside this, order book makes the investors knows who is placing an order to buy a stock, when they are placing and how much they are demanding for their order.
It will continue to provide great information to investors because of its transparency on the exchange, it allows us to know who are trading and gives in depth information about the coin in question.
Professor @yousafharoonkhan lesson has been insightful and have really helped my understanding with the cryptocurrencies. I hope to continue to learn more from you. Thank You professor @yousafharoonkhan. All the screenshot used is from binance