Crypto Academy Week 15 - Homework Post for Professor @yousafharoonkhan


This is Week 15 of Steemit Crypto Academy and I'm writing Homework Task for Professor @yousafharoonkhan

Part 1.

The term "order book" refers to an electronic list of orders for buying and selling specific securities or financial instruments that is sorted upon price level. The order book indicates the number of stocks bid or offers for each price point or each order book. Although some participants prefer to remain anonymous, the order book keeps track of all the participants involved in a buy or sell order.

A list of open buys or sell orders for any asset. In an ordinary order book, there is information about the prices of different commodities on the price the seller wants to sell it and that the price he actually sold it but in crypto, we need to use pairs for trading whereas in a traditional order book there are no dependent pairs 

https://image.binance.vision/editor-uploads/da0a4c22fb6943b2ac11a99f2e69b65f.png


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Part 2.

Finding n Order Book 

Step 1 

Go to Binance or any other exchange you have an account on.

Step 2

Login to your account, After logging in click on the market tab from the ribbon. 

When you click on the market tab, a new page will open for you. This [age contains a lot of information like coin pairs, Their last price, their price in the last 24 hours. 24h hours high and low the functions that occur in the last 24 hours etc. You also switch within the market price.

You can see the real-time price of different coins at the top of the page. Also, the trading volumes can be seen as highlighted in the screenshot.

Step 3

Type the coin name that you want to see in the order book for, Select the type of trade, and hit enter.

Now you can see the order book for your search asset in the highlighted area.

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Pairs

Pairs are the cryptocurrency assets or coins that can be traded for each other on the said exchange e.g.BTC/ETH. you can use these pairs to compare their costs also.

Support and Resistance 

Support is a barrier of the price which the market is reluctant to break at the lowest level. It is a kind of price barrier.

Price bouncing in an area of support before a breakout.

Support of BTC Source example

Resistance is the highest price barrier that a market is reluctant to break. Price doesn’t go any higher than the resistance and if it does, a new resistance level is created.

Price unable to break an area of resistance.

Resistanc of BTC Example source

Limit order

This order is placed on the order book. Limit order gives all the control of trading in your hands. In a limit order, you set a price of your choosing. This price is called the limit price. The advantage of this order is that the trade will only execute if your set limit price is reached.

Market Order

There is no need to put this order on the order book because it is executed immediately on the current best available market price.


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Part 3.

Amount a price 

The information displayed on both sides contradicts each other, the concepts of quantity (also called size) and price apply to both. In short, the quantity and price of each order show the total number of units of cryptocurrency you want to sell and at what price each unit is evaluated.

https://www.coindesk.com/wp-content/uploads/2018/07/orderbook-new-copy-e1532630456792.png

The Buy Side 

This side shows all the orders that are open for bidding. The offer that a buyer makes is known as a bid and it shows the interest of the buyer in buying the asset at that price. you see a lot of bids for a certain price this is known as buy wall. 

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The Sell Side 

p>T sell-side contains all open sell orders that are currently open.

When there are many sales orders (quotations) at a certain price level, the opposite of the buying wall will appear, this is called the selling wall. At the specified price level, a higher price sell order cannot be executed, so the price level of the wall is short-term resistance.

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Submitting due to short timeh2>Part 4.

Stop-Limit

https://cdn.steemitimages.com/DQmV9xJRCcCTvcMf6rxpdkkohzPMppT1cJ9UGH3t7kuYCqm/1%20vep><4 Verified.jpgp>As you can see above in the screenshot that we can set our stop limit order to avoid further losses in the trade. I have also attached my verified account profile of Binance as well as I show you the example of BTT.p>

I am buying BTT and setting a stop limit of $0.0025, When this value will reach then my assets of BTT will automatically sold in the market at market price. This is the best way to not loose much money if the trade we did gone wrong.

OCO

4 Verified.jpg

In OCO, it is same like Stop limit but we also put the sell price on our Profit price. Like, Select any coin. First clicked on the arrow and select the option of OCO and then set a limit, Stop limit.

That means If the price reaches the resistance level then our coins will automatically sell on the price which we set. And if the price go below to the support level then we can also set the sell limit order by putting price at stop box.

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The order books have many possibilities for us to do trades. The main thing is to understand the order book correctly and use it to our advantage. Almost every exchange provides a visual order book. You can use it to your advantage to keep an eye out for the Buy or Sell walls. they tell you when to usually buy or sell any asset or about the market's ongoing trend.

The individual order list is also helpful. You can use it to keep track of the selling or buying trends and if you see a big order of a few thousand bucks poop in, it can be a signal to opt-out as things may go out of your control if you are not a pro. The use of orders is very important. We can use limit price order to our advantage if we know how to buy and sell.

A market order can be used if you see and identify a rapidly changing trend in the order book. you can use a market order to your advantage, Order book has many technical indicators that can be used to identify market trends more effectively. They can help you to decide when to trade and when to hold. Order book can be an effective tool for making good profitable trades if it is used correctly.   


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Conclusion 

Order books can be very helpful if you know how to use them. They contain all the information about the buy orders and the sell orders that are placed on the exchange. The order book is a recorded ledger that keeps track of every transaction. You can use the order book to know about the changing trends in the market.


Comments 1


Thank you for joining The Steemit Crypto Academy Courses and participated in the Homework Task season 2 week 7.

  • question no 1 is not well explained , answer is very much short that not clear points
  • If you look at feature in the order book, you will see a lot of technical and simple advance feature. You have not searched for futures in detail. it is very much important to explore the order book to use the feature that will help you in trade
  • You have not specified the OCO order correctly and if you look at the screenshot it is incomplete and you have not specified your order in the text format, .
  • How an order book can help a trader make a profit , your answer was very much short , need more detail to explore this question۔

Thank you very much for participating in this class. I hope you have benefited from this class.

Grade : 5.7

30.05.2021 03:04
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