It is with great excitement that I write this post today, I am usually really excited whenever there is a task on the steemit crypto academy because that calls for an opportunity to enlighten myself more on cryptocurrency-related topics. Today, I will be answering the task given by @yousafharoonkhan and this professor on this task is helping us understand what an order book is and how we can utilize an order book to make different orders.

Question 1: What is an order book and how does crypto order book differ from our local market.

An order book is a complete compilation of transactional details going on with a particular valued crypto asset. An order book is usually used by an exchange so cryptocurrency users who wish to use that exchange for transactions can easily get to see the available transactional details and then decide at what rate to sell or buy a certain cryptocurrency token.

Explaining this concept from the view of our local market, different sellers and buyers go to a market to buy and sell one product or the other, each of the sellers have a certain price at heart with which they will love to sell their product, buyers also have their own prices at heart with which they would love to pay for the product, imagine that we take the price of each of this buyers and sellers and then we file them up in a single transactional book, this will be a perfect definition of what an order book of a local market would look like.

What makes a cryptocurrency order book different from what we would have in a local market is the availability of pairs. When we go to a local market, we use fiat as an exchange for everything we purchase but in the cryptocurrency world, each of those coins on the order book is seen in pairs which means you will receive the value of a token with another token. The order book completely has all the details listed out in pairs of their transactional details making it for exchange users to comfortably choose which of the order will be suitable.

Question 2: Explain how to find and order book in any exchange through a screenshot and also describe every step with text and also explain these words: pairs, support and resistance, limit order, and market order.

How to find an order book.

Finding an order book through any exchange is actually very easy and often displayed in a transparent form where everyone can easily see it.

From the screenshot above, we have the displayed list of various features but since what we want to see is an order book, we click on the market option and as we can see through the screenshot provided above, every coin available on that exchange will be displayed and it also comes with the total market cap of that coin.

If we have interest in a specific coin and not all the other ones displayed on that page, we can easily make use of the search option and then sieve out the details of the particular coin we are interested in alone.

Pairs: The literal meaning of pairs is having two things joined together but in cryptocurrency, it simply describes an asset or a cryptocurrency token that could be exchanged for one another without stress or issues. An example is ETH and BTC and another very common example that is available on virtually every exchange is BTC/USD.

Support and resistance: This is a technical term used to describe the show the level of buy and sell going on with the coin. Whenever there is a drop in the price of a crypto asset there seem to be more demand hence a support zone is created but on the other hand, when there is a rise in the price of a crypto asset, there appears to be more sale, therefore, leading to the creation of a resistance point.

Limit order: This is simply a valuable option provided by the market, providing every trader with the opportunity of setting the limit of the price where he wants to sell his crypto asset, the moment the market price hits that points there is an automatic execution of the trade but if the market price does not get to the point of order then there won’t be any automatic execution of the trade.

Market order: A market order is an immediate market price for a certain transactional token as long as there is a trader to buy and another to sell then market orders are filled almost instantly.

Question 3: Explain the important future of an order book with the help of a screenshot.

From the screenshot, it is very clear that the buy and sell are the very important features of an order book, without an option of buy and sell then there will be no need for an order book in the first place.
The buy feature shows the available order price set by different cryptocurrency traders while the sell options show clearly the different available prices that people are willing to buy that particular coin for.

Question 4: How to place buy and sell orders in stop-limit trade and OCO.

As shown in the screenshot, I am using Binance exchange to make an explanation, opening the order book will reveal different order options, with every one of these options made available there is a choice to either choose to buy or sell. The orders displayed also ranges from limit order to market order as well as stop limit and the likes as displayed clearly through the screenshot.

Question 5: How to order books can help in trading to gain profit and protect against losses.

The order book is a complete guide to the world of trading, it guides users correctly on when to make the purchase and when to sell to make a profit and avoid huge loss.

My personal experience.

Whenever I am about to get involved in any trade, I take a quick study at the order made available then I can determine what the price to set for that particular transaction will be for me.

Conclusion.

I appreciate the opportunity to learn again from the steemit crypto academy this week, I appreciate the @steemitblog for this beautiful opportunity and I also appreciate @yousafharoonkhan for this interesting and educating topic.