Hello dear crypto friends, hope you will like my entry of the assignment given by professor @yousafharoonkhan . In this article, I desired to write on exchange order book
Question no 1
What is meant by order book and how crypto order book differs from our local market. explain with examples (answer must be written in own words, copy-paste or from other source copy will be not accepted)
From my knowledge, an order book exhibits the total list of what is happening concerning buying and selling on the exchange platform. If you are newly introduced to and exchanging sites like the binance you will observe from the front page of The Exchange site what we mean by an order book. This other book lists out the correct buy and sells orders for an asset organized by price.
Now comparing this to the local market it is so understandable that Traders at the local market bid prices depending on what they intend to buy. Although the seller may list out his or her prices but in some cases, the goods might be sold out at a higher or a lesser price counting on the quality of the products. But in the crypto order book, there is no fixed price as prices are frequently changing from time to time.
In crypto order book, coins are always in pair and you must find the correct pair that matches whatever coin you are intending to trade, but in our local market one can simply move to the desired products he needs to buy and make a payment without the seller having the concern of whether the buyer has what he (the seller) can buy or exchange with the buyer.
In the cryptocurrency order book, we did not have such an option as you must remember a perfect pair before you can carry out any transaction.
Diving deeply into the crypto order book we can spot what is happening in the electronic marketplace. Take a look at the screenshot below.
From the above screenshot, you can discern the whole order without difficulties. This is what we called an order book in cryptocurrency. Study the screenshot above to acknowledge other useful tools like the buy and sell which I have indicated with arrows.
Another useful tool we can find in the other book is their depth tool.
Which these we can know the state of buyers or sellers at a particular time. This helps us to know if we can proceed with a transaction or not. Take a look at the screenshot. From the picture, we can understand better that there was a higher number of buyers according to what we are seeing from the chart above than the number of sellers. The buyer is revealed with a green chat while the seller is demonstrated with the red color located on the right side.
Question no 2 :
Explain how to find an order book in any exchange through a screenshot and also describe every step with text and also explain the words that are given below. (Answer must be written in own words)
Support and Resistance
Now how do we locate or find order books in the binance exchange? If you have been studying the screenshots I gave above, you will see that locating the order book is not far-fetched because binance has made everything on their platform so easy that even an amateur can make the useful resource of their exchange platform.
Without wasting much of our time let's see how we can access the other book from the binance Exchange website. First, if you are making use of the Android version of binance then simply launch the application from your mobile phone.
After you must have successfully logged in to your binance account, at the main binance page which I have shown with the screenshot below,
Locate the market which I have reflected with an arrow couple with the box. Click on the market and on the new page search for the coin pairs that you desire to trade.
On this occasion, I will be searching for Steem paired with BTC. Take a look at the screenshot below.
When you find the pair you are searching for, click on it. Now another page will pop up. This is where you can locate the order book of the chosen pairs on binance. Study the screenshot below.
The order book is marked and indicated with Mark. Just study the screenshots closely.
Pair in crypto trading or cryptocurrency are matched digital assets which are interchangeable or are tradable without difficulties on an exchange. Traders need to understand the trading pairs to acknowledge the fee between various assets on the exchange. Many exchange will allow you to choose between different pairs so that one can easily choose a pair depending on the currency you already possess.
For instance, take a look at the screenshot below
You will observe that a lot of assets are paired with a different one. Although not all exchange platform gives its user the favor to pair cryptocurrencies and that of Fiat currencies like the US dollars. But in binance, we can easily choose such pairs.
Support and Resistance
To understand what support and resistance mean in cryptocurrency Trading, then you need to study the chart carefully. To simplify what support and resistance mean, let Me clarify them one after the other.
In an exchange chart, there is always a point where the assets will reach and are pushed up after the downfall of a crypto chart. Let's take support as a floor in a crypto chart. And let's assume that an asset is falling in price at a certain period. Now there will be a point where the price charts will reach and will suddenly bounce up again that is starting to rise again. This point where the price chart started to bounce up is known as the support.
Now let's look at what Resistance is. It will be reasonable to learn that Resistance Is Now the opposite of what we discussed above. Here, the price chat tends to increase due to pressure from buyers. The rate of buyers that increased because of sell pressure will cause the price level in the chart to act as a ceiling or known as resistance. So in other words, resistance act like a barrier that hinders a price chart from breaking through.
This type of order is accomplished on the other book after a specific limit price and you are the one to determine this limit price. So when you wish to execute a limit order the transaction will trigger off only when the price in the market matches your limit price. Hence, you can take an advantage of the limit order by buying at a lesser price or selling when the price pump than the current market price.
In a market order, transactions are not being carried out immediately at the current market price limit order will strike off on the order book if the market price reaches the desired price you prefer.
In a market order, you need to quickly buy and sell at the available best actual price. A market order is executed immediately and it doesn't need to take time because the transaction is performed depending on the market price.
Question no 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 (Answer must be written in own words)
There are so many important features we can see from the other book. Let's review them one after the other. Although depending on the exchange platform you are making use of, the outline of an order book can vary.
Let's start with the buyer's side and seller's side. Order book gave us equal stand in a crypto Market Place. Hence making us sell and buy without hiding any useful information. As a market recorder, it has the buyer's side and the seller's side.
Visual demonstration found on the order book, that is, the table of numbers which comprises of prices and the total amount from both sides help us understand the market better. This feature helps us to learn the relationship between buyers and sellers and we can easily spot an overall knowledge of market demand and supply.
For instance, 3,560.10700 are being sold at the price of 35661.07 on the buyer's side. With the unit filled on the other book, we can see different units being sold at another varying level of price.
Orders are now being matched automatically with the help of the other book depending on the trader's preference? This can be proved when the order is executed based on the current demand of the market and its supply as well.
Again the limit order is another useful tool or feature found in an order book. Now traders can decide to make profits by setting price level at which they want to buy and sell. When the price of the market attains the set price, the order will be finalized without the approval of any third party.
Question no 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)
Assuming that we want to sell an asset like the BNB at a more profitable price than the current actual price of the coin, then we move to the market place choose an asset that we want to sell, and click on it. Now I will choose BNB for my explanation.
On the trading page, click on sell and select the limit order tab, we now need to set the price manually.
Set the price and amount and click the cell BNB button. You may want to choose profit amount by clicking the percentage button and you get to place a limit sell order for 20% 50% 75% or 100% of your balance.
When you are done, a message will pop up showing that your limit order has been confirmed.
You can initiate the same procedure when you want to buy, but this time you will click the Buy which is on the left left-hand. Take a look at the image below.
Now fill in the amount and click on buy.
A message will show up when your order has been placed.
How to buy and sell order in OCO order.
OCO is known to be "one cancel the order". It is an order that requires two orders at a particular time. It works with the stop limit order and with a limit order at the same time but basically, in executing this order, only one order will be completed while the other will be canceled. And you should know that rejecting or terminating one of the orders will cause the other one to stop.
The basic feature of OCO is to take profits to minimize potential losses.
Now let's see how to make use of this type of order on your binance accounts.
First, head to your verified binance account and locate the main exchange front and then look for the trading area. You may follow the screenshots below.
After locating the trading area, hit the "limit" so that a tiny box containing an option where you can choose the OCO will drop. Choose the OCO and proceed with filling in space.
Binance will always remind you that OCO orders can be made as a pair of buying and selling orders. You can get more useful information by clicking on the mark I indicated with an arrow.
Let's proceed on. After getting the OCO order page, you now need to fill in the gaps.
On the " stop-limit" order, I put 0.0024900 BTC. This is the real price of my limit order after the stop order which is 0.0024950 will activated. The "amount" is the quantity of my order which is 23 Steem. And lastly, the "total" value of the order I made.
Now from my screenshot, you will see that my stop price is 0.0024950 while the limit price is 0.0024900.
What this order stands for is that my stop-limit order will take effect when the price reaches 0.0024950. Although the price of my order would be 0.0024900. Quoting in a diverse way, when the STEEM/BTC drops to or a price below 0.0024950, the limit sell order at 0.0024900 will be implemented.
Question no 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
From what I have acknowledged so far the other book serves as one of the useful tools in the field of crypto trading.
Because they assist Traders to study the buyer and seller Concerns at a particular level of price. The data we can read from the order book can provide us with useful information about potential support and resistance levels. One can easily know the best time to trade to gain more profit from the actual coin he has at hand.
Again, with the introduction of the OCO order, we can now trade without much agitation as this feature works automatically without waiting for any third-party approval. With the OCO we now trade in a more versatile and secure way.
Hence traders make a profit using this feature from the order book. We can spot the promising season to trade coins because we can skim from the prior data of how a particular coin moved.
In conclusion, in Trading, we all need to have the full knowledge of how to use and read the order book because it is a useful tool in Trading. Understanding how to use the other book will help us to comprehend what is going on in the market. The more your master your order book the more you can determine your orders in Trading.
Who Am I?
I am just a beginner who lives in the Western Hemisphere of Africa with his parents. My name is James but you can notify me with @churchangel, here.😂
Being the first child, My parents, Mr. and Mrs. Onu who are just wonderful And hardworking couples. My father is an electrical engineer while my mother is a trader. They always work collaboratively just to make sure that their children don't lack the necessities.
I graduated from high school in the year 2018. And My favorite subjects are physics chemistry and biology. I am going to enter the university because my goal is to study these subjects in the future and to become a respected professional in one of the fields.
Between, I am an accomplished computer hardware technician. After I obtained my SSCE certificate, I took interest in learning more about computer hardware and its maintenance.
I am obsessed with all tech-related and I enjoy using my skill to contribute to the exciting technological advances. I'd spend my free time learning about programming and also assisting people on how to fix any problem related to Tech!
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