What is Order Book & Market Depth?
When trading spot assets, two key tools help you understand real-time market conditions: the order book and market depth. Together, they provide insight into liquidity, supply and demand, and potential price movement.
- Order Book
The order book is a live list of all active buy and sell orders that have not yet been executed. It contains:
Buy Orders (Bids): Traders looking to purchase at a specific price
Sell Orders (Asks): Traders looking to sell at a specific price
The order book updates continuously and reflects current market interest at each price level. In simple terms: 👉 It shows who wants to buy or sell, and at what price.
- Market Depth
Market depth represents the total amount of buy and sell orders available at each price level. It is often displayed in cumulative tables or depth charts. Market depth helps traders evaluate liquidity:
Large buy orders → potential support
Large sell orders → potential resistance
More orders at a level → price becomes harder to move
Fewer orders → price becomes more volatile
In simple terms: 👉 It shows how much you can trade at different prices.
Summary
Order Book
Displays all active buy and sell orders
Buy/Sell prices and available quantities
Market Depth
Shows liquidity and potential support/resistance
Cumulative order volume across price levels
Understanding the order book and market depth helps you evaluate liquidity, anticipate price movements, and choose better entry and exit points when trading.
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