Educational Post
An order book is like a real-time list of all the current buy and sell orders for a particular asset, such as stocks, commodities, or cryptocurrencies. It provides a snapshot of what buyers are willing to pay (bids) and what sellers are asking for (asks), helping you see market demand and supply.
How Order Books Work
In high-liquidity markets, you will notice that order books are live and constantly being updated. As new buy or sell orders come in, they are added to the list. When a trade happens, the relevant orders are removed from the order book. Essentially, order books are where you see the open orders that represent ongoing negotiations between buyers and sellers.
If you're a buyer, your order will be added based on the maximum price you’re willing to pay. If you're a seller, it’s based on the minimum price you're willing to accept.
