The Order Book
The heartbeat of every exchange — understanding bids, asks, and depth
What is an order book?
An order book is a live list of all the buy and sell orders currently waiting to be filled on an exchange. Think of it as a marketplace notice board — buyers pin "I want to buy 0.5 BTC at $67,400" and sellers pin "I want to sell 0.3 BTC at $67,450."
The exchange constantly matches buyers with sellers. When a buyer's price meets a seller's price, a trade happens and both orders are removed from the book.
Bids vs Asks
People who want to BUY BTC. Listed from highest to lowest price. The top bid is the best (highest) price anyone is willing to pay right now.
People who want to SELL BTC. Listed from lowest to highest price. The top ask is the best (lowest) price anyone is willing to sell for right now.
Reading the order book
Here's a simplified example of what an order book looks like:
The mid price ($67,420) is between the best ask and best bid. The depth bars show how much volume sits at each level — wider bars mean larger orders waiting there.
What order book depth tells you
"Depth" refers to how much volume exists at each price level. A deep order book means large orders on both sides — this is a sign of a healthy, liquid market where big trades can happen without moving the price much.
Traders watch for unusual depth changes as signals. A sudden wall of sell orders appearing above the current price can signal resistance — a barrier the price might struggle to break through. A large bid wall below can signal support.
How EGY-AI uses the order book
EGY-AI connects to Binance's depth stream (updated every 100ms) and displays the live order book on the Trading page. The GA's strategy parameters don't directly read the order book today — they use moving averages and RSI — but the order book is visible to you as a trader and provides important context for understanding why the bot's signals behave the way they do.
Key vocabulary
- Bid
- A buy order. The highest bid is what buyers are willing to pay right now.
- Ask
- A sell order. The lowest ask is what sellers will accept right now.
- Spread
- The difference between best bid and best ask. Measures market liquidity.
- Depth
- The total volume of orders at each price level.
- Market order
- Buy or sell immediately at whatever price is available.
- Limit order
- Buy or sell only at a specific price. Sits in the book until matched.
- Support
- A price level with strong buying interest — price tends to bounce here.
- Resistance
- A price level with strong selling pressure — price tends to stall here.