Hello, fellow Steemit users. Our professor @yousafharoonkhan has very well made us understand the concept of the exchange order book and its uses. So, now, I present my homework assignment which I prepared from my understanding of the lecture.

Q1. 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, copy paste or from other source copy will be not accepted)

Order book simply refers to the compilation of details regarding the buying and selling of particular assets at a particular place. The book here is in printed form and the details regarding the buying and selling done by a shopkeeper are handwritten in this book. The values in the book are different depending on the rates at which the buyers and sellers have sold their goods.

The crypto order book is a bit different from the regular market order book. Here, the information recorded is in pairs and digitally stored over the internet. By pairs it means, trading one cryptocurrency for another. For example, you purchase ETH using USDT then, the pair will be ETH/USDT. In a similar manner, a person can exchange their ETH for USDT. These records are maintained in the crypto order book under the respective buy and sell sections.

The difference between regular order book and crypto order book are -

• A normal order book is maintained on a diary with pages and the information is handwritten whereas a crypto order book is maintained digitally over the exchange platform and the information is automatically added whenever a sale takes place on that platform.

• Regular order book does not list its assets in pairs whereas in the crypto order book the trading takes place in pairs.

• A person can haggle with the prices of a regular order book and get the prices changed to his convenience whereas in the crypto market, a person has to follow the prices listed in the crypto order book.

• Features such as Limit order and OCO are not applicable in a regular order book but only in the crypto order book.

• The crypto order book can be viewed by each and every trader whereas the regular order book is accessible to only a few higher-ups in the market and not to every merchant.

Q2. Explain how to find order book in any exchange through 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

To answer this question, I would like to demonstrate it using the Binance Exchange. I have recently made an account over this exchange and I am enjoying using it as well. Binance can be accessed both through the web browser and the app. I will be demonstrating through the app.

Step 1 - Log in to your Binance account.

Step 2 - You will see an option 'Markets' located in the top left bar on the site. Go to that option and click it.

Step 3 - Many different pairs and markets will appear on the screen with a lot of detail.

Step 4 - There is an option of Search available at the right side of the page. You can go to that option and search for your desired pair. For example, I searched for BNB.

Step 5 - Now, go to the 'Trade' option that appears on the right side. After that, you have to choose your desired pair with BNB.

Step 6 - There alongside the graphs and details, appears the Order Book. The red zone represents 'Sell' and the green zone represents 'Buy'.

Pairs -

The cryptocurrencies are listed in the crypto order book in terms of pairs. This pairing means that one cryptocurrency can be exchanged for another or vice versa. For example, let's take the pair of BTC and USDT or BTC/USDT. Now, this pair implies that BTC can be purchased using USDT or BTC can be sold to purchase USDT. Hence, the trading pair works in both ways at the market.

Support and Resistance -

During the downfall of a market, the market tends to fall. When the market appears to be going further down, the buyers try to seek an advantage out of this and start buying the asset so much so as to prevent it from further falling down. Thus you can say that Support represents a spot from where the market is expected to refrain from falling more. The Support line can be seen as a mark as to the market for the asset won't go down any further from this. It can be drawn by connecting the downtrend peaks.

Resistance is just the opposite of Support. During the uptrend of a market, when the price of a particular asset appears to have risen enough, there comes a point where people holding this asset start selling it. This spot represents the Resistance and the price for the asset starts falling below. The line of resistance represents when a particular asset is prevented from rising upwards. It can be plotted by joining the peaks of uptrends.

Limit Order -

This a feature of the Crypto order book and is available on various exchanges. Limit order basically allows a trader to buy or sell a particular asset at their desired price. For example, if you want to purchase Steem and its current value is $0.63 but you want to purchase it at $0.50. So, you can place a limit order for Steem at $0.50. This order will get executed as soon as the price of Steem reaches $0.50. But this order will not be executed if the price of Steem does not reach $0.50, so it is important to keep that in mind as well. The same process applies to selling as well. If you have purchased Steem at $0.63 and you want to sell it at $1, then you can place a limit order for it. This order will be executed only when the price of Steem reaches $1 or more.

Market Order -

Market order refers to purchasing a particular cryptocurrency at the market price. They are executed when a trader buys or sells at the current market price. These types of orders are fast and immediately executed. This is because the buyer or seller wants the transaction to be done with no change in price. For example, if I want to buy Steem at its current price which is $0.63 then I have to place a market order.

Q3. Explain the important future of order book with the help of screenshot. In the meantime, a screenshot of your exchange account verified profile should appear (Answer must be written in own words)

The order book represents the transactions that take place within just a matter of seconds over the crypto market. The listings of the order book that are displayed to us keep on changing with time. At the side of the order book is the buy and sell option, which is another feature of the order book. lEt's take a look at how to buy or sell a particular crypto asset -

• Buy Order -

  A buy order is used when you want to buy a particular crypto of the trading pair. Then, you use the Buy option that is displayed there. For example I wanted to buy some BNB with some ETH that I had in my wallet.

So, First I would go to the Buy section displayed there.

Then, I would select as to how much BNB I want to purchase, and accordingly, the price of ETH will be dispalyed. For example, if I want to purchase 0.5 BNB then I would have to spend 0.066ETH.

Then, if I clicked on the Buy option, then my transaction will be made.

• Sell Order -

  A sell order is used when a trader wants to hand over the cryptocurrency they currently possess in exchange for the other cryptocurrency of the trading pair. Therefore, in such cases, the Sell option is used. For example, if I wanted to sell some BNB for some ETH.

First, I would go to the Sell section displayed alongside the order book.

Then, I would select as to how much BNB I want to sell, and accordingly, the ETH amount to be earned by me will be displayed. For example, if I sold 0.7BNB in my possession, then I would get 0.0929 ETH.

Then, if I clicked the Sell button, the transaction will be executed.

Q4. How to place Buy and Sell orders in Stop-limit trade and OCO ,? explain through screenshots with verified exchange account. you can use any verified exchange account.(Answer must be written in own words)

Stop Limit Order

- Stop limit order is basically the kind of order that uses both the top loss and limit order. This order is placed with the intention of confirming desired profit or minimizing the loss. For placing a stop limit order, one must have proper knowledge of support and resistance. We need to set two prices for this order -

• Stop price - At this price, the stop limit order becomes limit order. It is the start of target price.

*Limit price - At this price the order is likely to get executed. It is the lower limit of target price.

How to place Stop limit orders -

• Buy using Stop limit order - Go to the Stop limit option displayed in the section beside the order book. Select the stop and limit price and then confirm the transaction by clicking buy.

• Sell using Stop limit order - Go to the Stop limit option displayed in the section next to the order book. Select the stop and limit price and then confirm the transaction.

OCO -

OCO stands for one cancels the other. In an OCO order, there are two orders clubbed together which cancel each other the moment one of them gets executed. These types of orders are placed in markets with higher risks. For example, if we place a limit order and a stop limit order, the moment the limit order gets triggered the stop limit order gets cancelled or in another case when the stop limit order gets executed then the limit order gets cancelled.

Let's take a look at how these orders are placed -

Go to the arrow marked at the Stop limit order and change it to OCO.

• Buy order using OCO - After changing the option from Stop limit order to OCO, all you have to do is fill in your desirable details. Then click Buy to confirm the transaction.

• Sell using OCO - After changing the option from Stop Limit to OCO, all you have to do is fill in your desirable details. Then click Sell to confirm the transaction.

Note : These types of orders require high knowledge of the market and its movements.

Q5. How order book help in trading to gain profit and protect from loss?share technical view point, that help to explore the answer (answer should be written in own words that show your experience and understanding)

The order book, in particular, is a great tool that has been provided to us by these crypto exchange platforms. The order book provides us with the day-to-day volume of trading that is taking place at any moment. It shows in how much quantity and at what price are people purchasing a particular crypto asset. This information can be used very well by traders when dealing with trades on a regular basis or even when they take a gap while trading. This helps the buyers and sellers improve their skills.

The order book has the buy and sell option as well. And it's not only that, even these two options come with several features. There is Market order, Limit order, Stop limit order, and OCO. These tools cater to each and every need of the traders. Whatever the traders wish to initiate according to their mindset, they can do so by using these features aptly. These options are there to maximize the chances for profit and minimize the chances of loss for the traders.

There are a few more things as well, We must have knowledge regarding Support and Resistance. These two terms play a very important role in determining the trend of the market. Then there are also, some technical indicators available with the order book. These technical indicators help in improving the process of trading. indicators like MA. boll Trix. are often used by traders.

To share my personal experience, I have always found the order book a gem whenever I take up the task of trading. this order book has so many features that I have yet to explore and gain knowledge of. Whenever I think of purchasing a cryptocurrency I always study the order book carefully. Then, I would look for Support and Resistance to determine the market's trend. Thereafter, I would see as to which type of order would suit me the best and maximize my chances of profit. After that, I would place my order.

Conclusion

In conclusion, I would like to say that I am truly grateful for preparing this post for professor @yousafharoonkhan. By preparing this homework task I learnt about the order book in a lot of detail. I learnt about its various features and the different types of market orders there are. I learnt how to buy and sell cryptocurrencies through these various orders. I also learnt about Support and Resistance. I am very obliged to prepare this homework assignment which made me learn so much.

Thank You.

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