An order book is a real-time list of buy and sell orders for a financial instrument, organized by price level. It shows the supply and demand at different prices.
Structure
Bids (Buy Orders):
| Price | Volume |
|---|---|
| 1.0850 | 50 lots |
| 1.0849 | 30 lots |
| 1.0848 | 80 lots |
Asks (Sell Orders):
| Price | Volume |
|---|---|
| 1.0851 | 40 lots |
| 1.0852 | 60 lots |
| 1.0853 | 25 lots |
Reading the Order Book
- Large bid walls — Strong support (many buyers)
- Large ask walls — Strong resistance (many sellers)
- Thin book — High volatility potential
- Spread — Gap between best bid and ask
Limitations
⚠️ Not all orders are visible (hidden/iceberg orders) ⚠️ Orders can be placed and cancelled instantly (spoofing) ⚠️ More useful for crypto/stocks than forex ⚠️ Requires Level 2 data access