Assalamualaikum,
Hello and greetings to fellow Steemians. Today I am going to show my homework post for Professor @yousafharoonkhan in which I deeply describe about order book and its complete usage with types of orders. I hope you like it

Question No 1 :
What is meant by order book and how crypto order book differs from our local market. Explain with examples.

ORDER BOOK:

       Basically, An order book is a book that contains all the essential details of what have bought and what have sold in other words Bid/Ask or we can say offer and demand. These records help buyers and sellers and also improve market transparency because they provide crucial trading details. The order book is generally divided into three main parts:
1. Buy orders: Buy order contains buyer information including all the bids, the amount they wish to purchase, and the asking price.
2. Sell orders:Conversely, Sell orders contain sales information including all the asks, the amount they wish to sell.
3. Market orders History: It contains all the history of the transactions that took place in the past.

Difference Between Crypto orders book and Conventional Orders Book:

CONVENTIONAL ORDER BOOK:

       The conventional order book means a log that contains all the information, history, and records of the demand and sales which the buyers and sellers did in the past. These records in the conventional order book are kept manually. For example, you go to a market to buy some fruits or vegetables and you came across different kinds of sellers and their different prices for the same vegetable and the fruit, So you take all the considerations of the sellers into a book in form of a log which is known as an order book in the local market or conventional order book.

CRYPTO ORDER BOOK:

       These order books are different from the conventional in terms of how they are kept(Digitally). Crypto Order books are used by almost every exchange website like Binance, Coinbase, etc...to list the orders for assets (cryptocurrencies) like Bitcoin, Etherium, Dogecoin, etc. Another major difference between a local market order book and a crypto order book is that you can trade in pairs in the crypto order book. Pairs means suppose a buyer wants to buy a Bitcoin and seller wants some Etherium in order to make the deal successful, It's called a pair trade.

In simple words,

• You can trade in conventional Markets in just one currency which is authorized by the government while in the Crypto market system you can trade in pairs, one currency for another currency.
• The price negotiation in the conventional market is not simple, They sell and buy at a fixed price. Prices are unchangeable you have to pay the tagged price in order to buy.
• You cannot predict the prices of the assets in the traditional market just by doing the technical analysis at home. It depends upon the amount of supply done by the company.

Question No 2 :
Explain how to find the order book in any exchange through a screenshot and also describe every step with text and also explain the words that are given below. (Answer must be written in own words)
Pairs
Support and Resistance
Limit Order
market order

In order to find the order book on the Binance account, Follow the given steps:

• Search Binance Exchange on google.com and click on the official website of Binance exchange.
  -Binance website then will ask you to log in, After logging in click on the markets tab that appears at the top left corner.
• Then, select the pair you want to trade, Suppose you want to trade in Fiat, Click on the fiat market.
• After that search for the coin you want to trade in, I select ETH/USDT trade.
• Now you will see the order book of ETH/USDT trades.

Trading Pairs:

      When we uses trading pairs,It invloves two coins which conatins Quote Currency and Base Currency.

• Quote Currency: It's always the one that usually appears on the right when you look at the chart or any kind of pairs list. Quote currency will be the coin that you want to use to trade with, If you want to accumulate more money you should be using a stable coin like USDT which is more popular, and If you want to accumulate more coins as Etherium lets say, then you will be using Etherium as a quote currency.
• Base Currency:Base currency is the one you want to use against the quote currency, Let's say we have USDT dollar and we want to make more money so we will be pairing USDT with another coin let's say Bitcoin as a base currency. In this way, we invested our UDT money in Bitcoin, and if for instance the value of bitcoin increases then you gonna have more USDT in your account.
  

Support and Resistance:

• Support: Support is where the price tends to bottom out it means where the price of an asset tends to reverse. Support is where the level is supporting the asset price. The support level represents a price point that an asset struggles to fall below over a given time period. In simple words, Support is when there are buyers waiting to prevent a price from going any lower.

• Resistance: Resistance is a kind of borderline that always counters the assets to go uptrends. The resistance level represents a price point that an asset struggles to rise above over a given time period. In simple words, Resistance is when there are sellers waiting to prevent the price from going any higher.

Advantages Of using Support and Resistance in the Crypto Market:

       It's true that you achieve a big move by using the technique of support and resistance in your coin trades,

Limit Order:

       Before talking about the limit order you need to know what satoshi is, SO satoshi is the smallest fraction that a bitcoin can be divided into For example suppose you are getting 0.00000205 Tron/BTC pair it means Tron is coming right now in at 205 satoshis now that is very important because let's say that you wanted to buy Tron but you are hoping for it to dip down(downtrend) to 205 satoshis and whenever it comes to 205 satoshis you are going to buy some Trons, So to do that and if you were to sit and just watch the price all day it will be a bad idea, you need to be very patient and will consume your valuable time, So that is where LIMIT ORDERS works and can save your most of the time. You can set a limit of high or a low where you will be willing to buy or sell any cryptocurrency.

So, If you see the pic above you will see that the price is set to 206 satoshis, and all I have to do if I want to buy it on 206 satoshis, all you have to do is write 0.00000206 and write or slide how much you want it to convert to TRX when it reaches 206 satoshis and then it will automatically buy you TRX. Basically, the selling works the same way like if you have 100 TRX and I want to sell those 100 TRX but I only want to sell them when the price goes up like let's say the price goes up from 206 to 210, so all you have to do is write 0.00000210 and slide it to 100% and now when the price gets up to 210 it will automatically sell those.

Market order:

       Now let's say you got no time for that and you just want to make a quick buy and want to make it right now whatever the price is at, well that is where the MARKET ORDER comes in, this that at the exact market price at the exact second that you hit by your order will get filled.

So if I want to buy any amount of TRX I will write the amount and it will buy me the exact amount of TRX on the price which is currently on the screen.

Question No 3 :
Explain the important future 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 a verified image of my account on Binance:

The features of any order fook in the exchange market include three parts:

• Buyer Side(BID):

If you see the picture below on the right side there are the buyers and with the green numbers are the amount they are willing to pay and in the middle is the quantity and this quantity multiplies with the amount(with green) to make the total which is on the rightmost side.

• Seller Side(ASK):
  The picture below shows the same things except for the amount on the left side in red color shows the amount of prize that people are willing to sell it and in the middle is the quantity and at last at the rightmost side is the market value total in USDT.

• Decimal:

This side of the order book contains decimals which a user of the balance can manipulate for the asset in a trading pair. The number of decimals however depends upon which kind of pair you are trading with, You can see the decimals below is for the pair BTC/USDT:

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.)

First of all, we have to talk about what is stop-limit order and what is OCO?:

STOP-LIMIT TRADE:

       Stop-limit order is an instruction you give to the platform to do two things, one is to stop when a set price has been reached and two is to create a limit order either sell your crypto or buy you crypto at a certain price, it is important to set up a stop-limit trade in order to save yourself from big loses or dumps at times when you are not physically present to do it by yourself.

![cry3.png](

Now, For example, let's say I bought bitcoin for 47000 to the USDT and hoped that price will rise from 47000 to 50000 dollars and then I will plan to sell them. Everything looks good during the daytime and the price even rose to 48500 dollars but then in the night when I was sleeping, unfortunately, the price dipped from 48500 to 30000. If I don't have a stop limit order in place it means the time I wake up I would have suffered a huge loss on that trade so to protect yourself from these unfortunate situations like these, I can set a stop-limit order to say one if the price of the bitcoin falls to 47500 stop. Two, Create a limit order for me to sell my bitcoin at a price of 47495 so in this case when I wake up in the morning and the price of bitcoin fell to 30000, I haven't suffered a loss because I bought it for 47000 and sold it 47500, I didn't make as much profit as I would have sold it for 48000 but I protected myself from loss.

OCO:

       OCO stands for one cancels the other and its a feature that allows you to
set two different orders against the same coin at the same time. But we all see all others and only one gets executed at the end of the day. Whenever one of your orders executes, it cancels the other one that why the name is one cancels the other.

It tells the platform to sell at the set price when a particular price is reached for example you can say if Etherium prize reaches 2100 sell my own Etheriums at 2090. let's say you buy a bitcoin at a price of 50000 to the USDT pay and the price is currently at 51000 but you are not sure if the price whether price in the coming days gonna rise or dip, However, you want to take two different actions depending on whether the price is gonna uptrend or downtrend, Assume that if the price goes up to 55000 you want to sell your bitcoin and take your profit but if the price falls down to 50500 you also want to sell your bitcoin so that you can get a small profit but you avoid getting a loss, So normally you won't be able to do this with the regular limits order because if you place a limit order to sell your coin it's going to lock that coin so you can't put that same coin in another order also if you set your price lower than the current market price your coin is going to sell immediately which is not what you want to do. but we also order you can set these two orders to sell the same coin at two different price points depending on whether the price is going up or down but let's say the price goes up and your bitcoin sells at 55000 sets to sell it at 50 500 will get canceled that's what the name one cancels the order means.

How to place Buy and Sell orders in Stop-limit trade:

First of all, I will select which coin I want to trade, So in the below picture, I selected BTC/USDT pair as shown below and select trade-in green box:

After that I am going to select the stop-Limit option as shown below, So currently the price of bitcoin is 36009.74 and so I will select the stop price as 37000(because in the past 24 hours it reached the highest 37400) and for the limit price, I could write 36500 and it will give the amount 1314355510 USDT as shown in the pic in Blue block:

How to place Buy and Sell orders in OCO:

Let's look at how to set buy and sell order in OCO on Binance:

• First of all, you need to sign in to your account, and in the tabs move your cursor to trade and click on classic as shown in the pic below,
  
• On the trading platform, I'm going to click on the arrow beside stop-limit and select as shown in the picture:

The part with the name Sell BTC is where want to buy because I want to sell and on the left side with the name buy BTC is where you want to buy.

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

The order book is divided into 3 sections from which you can get maximum profit without having any big losses.
The first one is the market order: This order type indicates that you want your order filled immediately at the next available price. If prices are changing rapidly, the next available price could be different than the price quoted when you initially placed the order. Investors who use market orders tend to be more concerned about the speed of a trade than the price. The lack of restriction on price means this order type has the best chance of being filled, but it also has the risk of being filled at a different price.
The second one is Limit Order: With a limit order, you specify a price, and the order won't be filled until the stock can be bought or sold at that price or lower. However, because of the price restriction, there's no guarantee the order will be filled quickly or at all. Investors generally use limit orders when they have a target entry or exit price and are willing to wait for the market to move in their favor.
The third one is Stop orders: Sto orders can be used as sell-stop orders when trying to limit potential loss in an investment. For example, an investor might set a sell-stop order on a stock she owns, specifying that if the stock falls to a certain price or lower, it'll trigger an order to sell the stock at the next available market price. This could possibly prevent more serious losses by getting out before the stock falls too.

CONCLUSION:

In conclusion, I can say that order books and their features help a lot the users of Binance like exchange markets, In fact, they can also prevent wasting their valuable time by just first understanding the features and then making full use of them. They can make their next move very intellectually when they are going to invest in the crypto market.

In the end, I would like to say thanks to @yousafharoonkhan who gave us this crucial information about the crypto market so we can save our time and money.

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