Hello everyone

I'm very pleased to participate in this week's lecture organized by @yousafharoonkhan. Below is my homework on this lecture.

All Screenshots were taken with my Samsung phone from my verified Binance account.

Created by me with my phone

What is meant by order book and how crypto order book different from local market? Give examples

An order book is the list containing open orders of buyers and sellers that are currently available on an exchange market for a particular trading pair. This book is configured electronically with a buy order and sell order of a particular pair of coins in the market, and is solely dependent on price level of the coin at that particular time.

The order book contains a buy order also known as "bid" usually written in green color and Sell order also known as "ask" written in red. These two orders on order book helps traders in making right decisions about trading in real-time.

An Order book also contains basic informations such as the Support level(A)and Resistance level(B)of trade, Real-time prices(C), Tomeframe(D), depth(E), Market capitalization(F), all as seen below.

A sample of an Order book


Screenshots from my Binance account

THE DIFFERENCE
The crypto order book is a tool that gives a real-time list of outstanding orders for a particular asset/coin. The order books represent the interests of buyers and sellers in trade and offers an platform into supply and demand which determines the price level of the particular asset. While, the Local Market involves trading directly by two parties;the buyer and seller, the reporting process with local market is not as rigid as trading with an order book and fewer time constraints is observed with local market unlike Order book that trades with real-time. And prices varies between buyer and seller too.

Explain how to find the order book in any exchange through screenshots and describe every step with text and explain these words:
PAIR
Support and resistance
Limit Order
Market Order

▪︎Finding an order book with Binance account.

I'll be using my Binance wallet for showing you an Order book practically.
Step1
First, click on Binance App on your phone, when it opens you click on markets, it takes you to next page.

Step2
Then it shows three headings;Spot, futures and zones. Now click on Spot, the SPOT TRADE PAGE On Binance, displays the various pairs of coins available in the exchange market, as seen below.

Step 3
Now click on coun of your choice (i clicked on DOT/BNB). The ORDER BOOK PAGE for DOT/BNB on the binance wallet appears, with the vital information of the particular coin to be traded.

From the screenshot above you can see the Avg Price, Market capitalization of the coin, support and resistance levels and timeframe. All of these are clearly labeled and marked in the previous picture above.
Here, this is the ORDER BOOK with dynamic prices with real-time. It shows the important features of the order book which is the buy and sell order. It also contain the OPTIONS at which the order can be traded. Which is limit, market, stop limit and OCO.

•PAIR
In cryptocurrency, the term pair means two tradeable coins. It describes the asset pair that can be traded for one another. For example, DOT/BNB are a trading pair, with this pair you can buy .
Polkadot coin with Binance coin or sell polkadot coin for Binance Coin.

•SUPPORT AND RESISTANCE
In Crypto market, Support is the price level of a coin in the market. As the price of a crypto asset/coin drops, the demand increases and thus there are more sellers than buyers at high prices. Whereas, Resistance arises due to supply of coin in market and the selling interest of the coin when their price level increases.

•LIMIT ORDER
Limit order is a feature on an order book with the specific price limit of a particular coin to be traded. With limit orders, traders can set their desired price to either buy or sell a coin. Limit Order is advantageous to the trader, as they can buy a coin at a lower price or sell at a high price than the current market price as at real-time.

•MARKET ORDER
A market order is an order used by traders to quickly buy or sell a coin at the best available price in real-time. With market order, trading of a cryptocurrency is done instantly with the current market price which is stipulated.

Explain the important features of the order book with screenshots.

The order book has features on it, and two important features of the order book are:

1. BUY ORDER
   

Buy order also known as 'bid' is an important feature of Order book, used by traders or investors to place an order to buy or sell a cryptocurrency. Buy order contains a list of trade for buyers with their desired prices for each coin. For example, a trader may instruct the broker to buy a cryptocurrency at the best available price or to wait(uses a limit order) until the desired price is reached before buying or selling a coin.

2.SELL ORDER

Also known as 'Ask' price. Is an order used by traders when they are ready to sell a coin. The trader either sells with the best available price or sets the desired price and wait for it to reach before selling the coin. Sell order contains a list of the current selling prices and the amount of coins to be sold at that particular price, and other important information from the sellers in real-time.

How to place buy and sell order under stop limit and OCO?

▪︎UNDER STOP LIMIT

When placing a buy or sell order with Stop limit option, the trader sets the desired price with the stop price option. For example, i want to buy DOT from BNB, first I'll set a stop price ,which is the limit price of BNB and the desired amount of BNB that will be profitable to me, corresponding with the limits and amount of DOT coin that I want to buy. When my desired price that have set with stop limit is reached, trade is initiated automatically. Placing a sell order with stop limit also requires same procedure as a buy order. The stop limit is somehow similar to limit order, as the trader has the advantage of setting a stipulated price for buying or selling a coin.

▪︎OCO

Placing a buy order or sell order with OCO(also known as One cancels the other) option is dependent on the principle of support and resistance levels of the price chart. This feature is a simple but powerful tool on order book, that allows traders to trade securely and in versatile forms. For example, i bought 3 BNB at 0.0026837 BTC available price, when i want to sell i will use the OCO feature to place a profit-taking order at 0.0030 BTC along with a stop-limit order at 0.0024900 BTC respectively. When my desired price is reached or rises above the limit, my sell order will be initiated and the stop limit order will automatically be cancelled. And, if my set price is not reached or drops, my stop limit order will be triggered and stop sells, to help me overcome losses. OCO feature uses limit order with stop limit order, but only one of them can be executed.

How order book aids in trading?

Order book aids trading in crypto market in various ways such as;

•Transparent and secure transactions
The order book is transparent to all traders, as you can see the person placing orders to buy a cryptocurrency, when the buy order is made, depth of trade, quantity of coin required, and the stipulated price. This list improves market trade transparency.

•Transactions overview
The order book gives an overview of a trading transactions, with best available price in real-time and helps traders to stipulate prices when trading.

•Making profits
Order book also prevent traders from incurring huge losses, as it works with Support and Resistance levels, thereby helping traders to maximize profits.

•Decision making
The order book also help traders in making better decisions to make profits, by enabling them to view the current market situation and set a desired price best for them.

CONCLUSION
Order book for cryptocurrency trading
Has given traders an edge to be more informed about the cryptocurrency market, as it has created an opportunity for traders to make best decisions on buying or selling coins. And gives an overview of the stipulated prices in real-time, the market manipulation, oder imbalances, support and resistance levels, which are advantageous to a savvy trader.

Thank you @steemitcryptoacademy for this amazing lecture . Warm regards to professor @yousafharoonkhan.