A cryptocurrency is a virtual or digital currency that uses cryptography for security and exchange this currency is known as trading.
Cryptocurrency trading is a kind of obligation on crypto pricing through buying and selling crypto coins on any exchange, or via contract for difference (CFD).
It empowers you to conjecture on the rising or falling costs of quick-moving worldwide money related markets (or instruments, for example, shares, lists, products, and treasuries.
For buy and sell you need to create an account on the exchange , put up some cryptocurrency in your exchange wallet. Buy and Sell means we need to buy and sell some crypto so for that we have some crypto or fiat to start trading. To view the market price you need an order book of the exchange in which you can see the ask and bid price. Orderbook plays an important role in crypto trading.
Let’s see what is order book and how it will be helpful in trading.
The order book contains a list of buy and sell orders. In order, price is actually the price that the buyer or seller are bidding/asking for the particular security. Best sell is always greater than the best bid price. When best ask and best bid match you are will be executed that means one trade has been done.
Let’s see the order book in detail:
Price level: - At the point when a few requests contain a similar value, they are alluded as a value level, implying that if an offer comes at that value level, all the sell arranges on that value level might satisfy that.
Crossed price:- When the order book is part of a matching engine, orders are matched as the interest of buyers and sellers can be satisfied. When the bid price of the order book is equal or higher than the lowest ask, then orders can be immediately executed and will not be part of the open order book. If this situation occurs, due to a condition of the market, the order book is said to be crossed.
Best price:-The highest price of the ask and the lowest price of the bid is known as the best ask price and best bid price.
Book depth:- The book depth is the number of price levels present at a particular time in the book. Sometimes the book has to a fixed number of sizes, and if orders beyond that depth are ignored or rejected, and in other cases, the book can contain unlimited levels.