Order Book - Bids and Asks
What is the order book? Well, the order book as what you see on the left side of the screen.
All these numbers that are regularly changing. The goal is to understand what is going on with these lists. Well the way trading works is that you put a buy offer or a sell offer in and whenever you do that it's added to this list. The green numbers are the buy orders from anyone who's currently trading at this time. The red numbers are the sell orders. The way you should think about it, is that the red numbers push towards down and the green numbers push towards up until they meet in the middle. The point is that the numbers meet in the middle to an agreed upon price. In order for someone to buy Bitcoin, the bid has to be higher than the ask. Once that happens that's when a new Bitcoin price is determined. Every time there is an agreed upon price, there's a trade and then the price is updated. You can see that price also on the right in the trade history where you should see the most recent trade price which is the same price you're going to see on the left between these two sections. You're also going to see it up on the screen where is labelled as “Last Price”.
If you want to see your offer showing up on the list, just type in the amount you are willing to pay for a Bitcoin. But here you will have to put two figures in. One of them represents the lowest and the other is the highest price you are willing to pay and then click on “buy”. Once you have done that, you will see a notifications saying “Limit buy order created”. You will also see that is added to your list down under “Open Orders”. No matter how hard you look at the order book, you are not going to see in the order if it's not close enough to the current price. So for example if the price is 25,000 dollars but you put in a limit order for 18,000 dollars, while your buy order was created, it’s not close enough to the current price therefore it will not be visible within the order book. So instead you can cancel this order and try to get as close as possible to the current price. So if one of the ask is willing to take this price, the order will be met. Once this order gets fulfilled, you will see it within the open orders and it should appear inside of the trade history. Next, once it was fulfilled your open order will disappear and you should be able to see it over in this trade history. Next, you can do the same thing with selling Bitcoin but this time you have to click on “Sell” instead of “Buy” which is called a “sell offer”. Of course, you want to put in a higher price than what you bought your Bitcoin so that goes through then you will make a profit.
You don't have to just buy and then sell because you can do both at the same time as long as you know what you're willing to pay for it. You can place a buy order in and it’s going to be waiting in your open orders until the price of your crypto asset drops. This is how you can work with the limit option so in the next chapter we will cover the stop limit option.
