ORDER BOOK

A list that contains all the buy and sell orders of an asset is reffered to as an order book, this list has all the open orders thatcan ne accessed on an exchange.the open order is just a buyer or a seller declaring that there are ready to buy or sell any asset.forn instance the XRP/USDT is an example of an open order.
The order book will contain the buy and sell orders of users to either buy or sell ripple. The order book can be equated to a market setting, I.e where buying and selling takes place but in this case it is the buying and selling of crypto assets. The order book is not restricted, anyone could make an open order on the order book, there order will be on the open order until it is cancelled by either the person who applied for the offer or the person who accepts the offer. Say, a person applied for an open order on a particular exchange to buy ripple for 10000 USD, another person will need to accept selling their ripple at that same time of 10000 USD. This does not go to say that when a person places an order, he will always see someone who wants to sell at that price. As we said above it could be likened to a market setting, the person with the higher price stand a higher chance of buying.

ADVANTAGES OF ORDER BOOK

The order book gives the users the opportunity of making informed decisions, it gives the users an understanding of the market trends.

DIFFERENCE BETWEEN A NORMAL MARKET AND ORDER BOOK

From our definition of what an order book is, we could already answer this question. To me there is little or no difference between the order book and a conventional market.

The major difference is that in the order book, transactions are well documented, but in a conventional market the transactions are most of the times not documented.

Both the order book and the normal market all perform buying and selling transactions, in both cases there is someone who is willing to buy and there must be someone who is also willing to sell.

HOW TO SPOT ORDER BOOK ON AN EXCHANGE

You may be wondering where you can find the order book, you may have been using the exchange app without taking note of the order book, shortly I will be showing you where you will see the order book on your exchange platform.
For this illustration I will be using the binance exchange app

Step 1: First is to download the exchange app or login to the exchange website.

Step 2: after opening the app or a successful login it will display an interface with various coin. ( in this case I want to check for the order book of BNB/USD.

Step 3: enter the coin you want to check for its order book

Step 4: it will open up the chart for BNB/USD or the coin you selected, under the chart you will see the order book.

PAIRS

Cryptocurrency pairs affords you the opportunity to compare the costs of two currencies. Not all exchanges makes it possible to pair cryptocurrency and fiat currency like the U.S dollar, except for exceptions like Gemini, Binance, kraken and coinbase who offer fiat trading pairs. Pairs makes it possible to illustrate the worth of the coins in relation to each other.

SUPPORT AND RESISTANCE

Support: the support refers to a level of price in which a downtrend can be able to be on hold due to high demand and the interest to buy. When there is a drop in price of and asset, the interest to buy shares will be on the increase, this results in the formation of the support line.
Resistance:- arises as a result of interest to sell when there is an increase in price.

Market Order: the market order is an order to purchase or sell an asset at its best price per time, the market order makes sure the order is carried out but that does not go to say that it will ensure any particular price.

Limit Order: this an order to purchase or sell an asset in which there will be restriction to how much you are to pay for an asset and how much you are able to receive for the sale of an asset. Although the restriction is set, it doesn't guarantee it being carried out.

IMPORTANT FEATURES OF THE ORDER BOOK

The features or components of an order book is as follows:

1.The buyer and the sellers side

The order book keeps a record of the market price and so it has to contain the sides for the two participants that is the buyer and the seller.

2. The Bid and ask features

It is also the buyer and seller side, the buyers are the ones who bid for a particular number of shares and the sellers ask for the particular price for their shares.

3. Prices

The main purpose of the order book is to keep records, the numbers in the buyers and sellers column is a representation of how much they are willing to sell or buy.

4. Visual demonstration

Order books contains table of figures that are made up of prices from both the bid and the ask sides. In other to make a clear representation of the link between the seller and the buyer,almost all the order books contains a visual demonstration . this aids the quick understanding of the users.

WAYS BY WHICH WE CAN PLACE BUY & SELL ORDERS IN STOP LIMIT TRADE

The following are the steps to follow in placing buy and sell orders in stop limit trade and oco.

First you open the exchange app (Binance for instance), click on the trades icon below, then click on the 3 tiny dots at the top.

Click on preferences:

Click on order confirmation:

Select the order type:

Advantage of using order book in trading, (i.e Profit and loss)

From the ideas given above. The order book gives you an idea of how the market trend is going, it helps you gain profit as it helps you to easily identify when the prices are cheap to buy, thisalso helps to regulate loss.

@yousafharoonkhan