Hello fellows. How are you all?

This is @AizazGhumman, here I am going to share my homework post on topic " Exchange order book and its Use and How to place different orders?" given by respected professor @yousafharoonkhan

Question No 1: What is meant by order book and how crypto order book differs from our local market. Explain with examples (answer must be written in own words,)

Order book: In very simple words, as the name suggests order book is a book or notebook that keeps a record of our orders. It contains all the information regarding our sales and purchases. With the advancement of technology, various businesses have shifted to online order books.
These orders book can be managed by bots or manually.

Real-life example: My brother has a business in cooking oil and ghee. Whenever he buys oil from a factory, he notes the price at which he bought it, the date of purchase, the amount of oil bought, and the date he needs to pay back in a notebook. He does this for every factory he buys oil from, such as Asia, Shama, Sufi, and Dalda. Then he has another order book in which he keeps a record of his buyers. He has an index in which he has written the names of the buyers along with the page number, which contains their records along with the date, price and amount, and company of oil bought

Crypto order books: Although used for the same purpose, crypto order books differ from our market order books in a number of ways. A crypto order book represents all the assets that are currently available or open for buying and selling. For example, below, I have attached a Screenshot from the Binance order book for BTC/USD pair. The orders in green show the
availability of assets for buying at a specific price, and the orders in red are open for selling at a specific price. These order books are highly valuable for traders as they help align buyers and sellers' interests at specific price levels. In the crypto world, these order books can also be managed by smart contracts. Which automatically buy and sell an asset when your desired price is reached.

Here is the summary of the difference between simple order books and crypto order book

Simple order book	Crypto order book
They keep a record of purchases and sellings simply in one currency.	It shows trading pairs open for buying and selling
Every merchant or seller has its own personal order book.	It is available publically on a blockchain ledger.
It needs to be filled by a person or manually.	It can be automatically handled through smart contracts or filled automatically by bots
Third-person involvement	You find all these features in a crypto order book.

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Question no 2: Explain how to find and order a book in any exchange through a screenshot and also describe every step with text and also explain the words that are given below.

Find an order book: You can find a crypto order book on an exchange. If we talk about Binance, there are two ways to access it through a website or app. Below I have taken screenshots from the website.

1. When you open the Binance website, you will notice the Markets tab on top in the same lane of the logo.

2. After clicking on the markets tab, the following screen will appear. This page will show different things, including different coins, prices,r daily price change, and market cap. Here you will also see different markets like spots, futures.

3. I further searched bitcoin in the 'search coin name' bar to open the bitcoin order book.

4. After I clicked on bitcoin trade, the following screen appeared that shows market data for bitcoin and USDT. And here you will find Order Book

Pairs: Pairs or crypto pairs, also called crypt trading pairs, are two assets that can be exchanged with each other on an exchange. For example, the BTC/USD pair. This means you can buy BTC with USDT, or you can convert your BTC into USDT. The two assets in a trading
pair do not necessarily have to be crypto. You can also have BTC/USD pair. In which you can exchange dollar and bitcoin with each other.

Support and Resistance: These are two analytical terms used in crypto trading. They are used when traders are making technical analyses on their trade. What happens is when the price of crypto drops, the demand for that cryptocurrency is increased, and this creates pressure on the market so that the price does not fall below it, so after some time, the price comes back to the original. This creates a support zone. It can be seen in the crypto chart as the downtrend that is about to stop or pause. It represents the floor below which the price does not drop. On the contrary, when the price of a cryptocurrency increases, traders want to earn a profit from it, and they sell the assets. This, in turn, again builds pressure on the market, and the selling pressure acts as a barrier in further increasing the price and creates a temporary zone of resistance. The resistance forms a roof rather than the floor on the crypto chart.

Buy BTC limit Order : A limit order means that you will set your own limit for an order. It allows you to set your price for buying and selling. When the market reaches your desired price, your order will be executed. For example, if the current price of a coin, say BTC is is 38267$, but i want to buy it when its price is 36500$,So i can place a limit order. When the price of BTC reaches 36500$, My order book will ultimately buy BTC for Me. In the screen shot you can see how i was purchased BTC

Sell STEEM Limit order : Similarly, you can also use limit orders for selling a currency when your desired price is reached. You can place a limit order by selecting your pair and selecting the limit option and put your desired amount and sell your currency . here i am showing you how to sell STEEM by limit order . Right now i have 89 STEEM in My BINANCE Account . recent STEEM price is 0.00001636 BTC . My target price is when 1 STEEM equal to 0.0001500 BTC then my all STEEM sold . and right now i was showing you how to sell STEEM by limit order.

Market order: Market order is the instant type of order in which we buy and sell according to the current market price. For example, the current price of STEEM at the time of writing is 0.000016BTC. So if I place a market order, I will have to buy or sell at this price.

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Question No 3 :Explain the important features of the order book with the help of a screenshot. In the meantime, a screenshot of your exchange account verified profile should appear

This is my verified account screenshot. All the screenshots from this point on will be from my own Binance account.

I will explain the features of the order book with the help of a screenshot from my Binance account.  In the order book, we see

• Trading pairs

• Buy or bids and sell or ask option with buy option in green and sell option in red

• We also have and order history option that shows the history of the orders in the specified pairs

• We can choose the type of order from the limit, market, oco, stop limit

  Here iam showing you all my mobile screenshots

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Question No 4: How to place Buy and Sell orders in Stop-limit trade and OCO? Explain through screenshots with a verified exchange account. You can use any verified exchange account.

Stop limit order: The crypto market is very risky; therefore, traders look for options to minimize the chance of losses as much as possible. This type of order combines the features of stop and limit order. For example, you set a limit for a coin to be 10.2$, and the stop price is set at 10. So when the market reaches 10$, it will trigger the limit order. We need to set two prices for this. here i will show you how to buy and sell with stop limit order .

here iam going to show you how to buy stop limit order in Secreenshot.

Right now iam showing you how to sell STEEM by stop limit order !

Before buying and selling through limit order, I will tell how I bought STEEM and sold it at the market rate. Here I have selected the pair STEEM/BTC.

OCO order: OCE stands for One cancels the other. When the market is very volatile, we can proceed with OCO. In which two offers are combined, which are often contrary to each other. When one gets executed, the other is canceled. Here we can take example of stop limit and
limit order. If the stop limit gets executed the limit order is canceled and vice versa.

Now let me buy and sell STEEM with OCO.

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Question No 5 : How order book help in trading to gain profit and protect from loss? Share technical viewpoint that helps to explore the answer (answer should be written in own words that show your experience and understanding)

Order books help traders to gain profits and protect themselves from losing. As the
order book shows the current market buying and selling activities, the traders become well informed of the trends. This helps them to make calculated decisions. With an order book, you can also place customized orders in the form of limit orders. For example, you can not speculate prices continuously, so you can trade efficiently by placing limit orders or stop-limit orders. When you see an abrupt rise in the price, and you want to sell your coin, you can do it
instantly through market orders. Another way of minimizing losses is through OCO orders in which we perform when the market is too volatile.

The order gives the trader how much demand there is for an asset at which price. It can also give them an immediate sense of where the market is headed. This enables us to make safe decisions. It provides sufficient information on trading volumes of coins to know the demand. When we know the demand, we can estimate if the price will rise or fall and understand the support and resistance zones. In addition to that, order books also allow us to use different indicators to calculate trading moves. Order books literally protect new to experienced traders from making large losses.

Conclusion

Order books are safe and secure means of analyzing markets and placing orders accordingly. While they are often considered not so significant, they can literally help us minimize losses by
placing limit orders, stop-limit orders, and understanding technical indicators such as support and resistance zones.

Thank you very much.

@yousafharoonkhan

Regard

@Aizazghumman