📘 The Order Book: How to Read the Market Between the Lines? 📈
Many newcomers only look at the chart, but pros know that the real magic happens in the order book! This is a real-time list of all limit orders to buy and sell. If the chart is history, the order book is the current intentions of the players.
🔍 What makes up the Order Book?
Asks (Reds) — These are sell orders. They are stacked from top to bottom (from the highest price to the lowest).Bids (Greens) — These are buy orders. They are located from bottom to top (from the lowest price to the highest).Spread — The difference between the best buy and sell prices. The smaller the spread, the higher the liquidity of the pair.
🚀 3 Strategies for Trading Using the Order Book:
Finding Support and Resistance Levels.
See a huge "wall" (large volume) in the green orders? That's potential support the price might bounce up from. The same applies to red orders—that's resistance.Assessing Liquidity.
If there are few orders in the book ("empty book"), any large purchase will cause a sharp price jump. Be careful with low-liquidity alts—slippage can be significant there.Tracking the "Whales".
Large players often place big orders to influence the market direction. But attention: beware of spoofing! This is when large orders are placed and immediately canceled to scare the crowd into selling/buying.
💡 Golden Rules for Square:
Don't trade solely based on the order book. Use it in conjunction with indicators and volume analysis.Look at the Market Depth. On Binance, this is a visual graph that helps you quickly understand which side is stronger.
Trading using the order book is a skill that requires practice. Try watching it for a day, and you'll start to see the market's "breathing"! 🧘♂️
What do you look at first: the candles or the volume in the order book? Let me know in the comments! 👇
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