What is Order Book?
Let's find out Order Book meaning, definition in crypto, what is Order Book, and all other detailed facts.
An order book is a physical or electronic document used to record the buy and sell history of an asset on a particular trading platform. While the concept of order books precedes digital technology, most platforms now use electronic order books that use an automatic matching engine to go through the list of buy and sell orders and fulfill them.
Order books contain different information regarding the trading of the asset. This includes the list of buyers and sellers, and a section for bidding and asking. Asking refers to the sell requests, while bidding represents the buy orders.
In the traditional structure, all bids are placed on the left side, while the asks are noted on the right. Bids are usually represented by using green, and asks are marked in red.
The interactions between the buyers and sellers can be logged in the order book using a number of visualization tools, such as line charts or tables. Japanese candlestick charting can be used alongside an order book to observe market changes and make well-informed trading decisions.
Order books typically record limit orders – orders that use prices set by the trader. If an order uses the current market prices for the trade, it is considered to be a market order.
The highest bid prices and the lowest ask prices are written on top of the order book. The difference between the highest bid and the lowest ask is known as the bid-ask spread, which is used to indicate the strength of supply and demand.