Order book: tackling between bulls and bears

Order book shows current orders to sell and buy crypto. Now we are going to explain how to use it. For your convenience download the CryptoRobotics terminal and explore order books there.

How the price on cryptocurrency market is formed

Prices on cryptomarket depends on supply-and-demand balance. “Bulls” - buyers are constantly struggling with “bears” - sellers. If buyers intensify their efforts, that means the demand rises on the market. If sales volumes increase, the bears are entering the arena and the coin cheapens.

Imagine a common market where 10 out of 15 shops sell tomatoes. Sooner or later one has to lower the price – the market is oversaturated. But all of a sudden somebody on a truck comes and starts to buy tomatoes in bulk. Other buyers get nervous and buy just in case – someone one kilo, another one – two kilos, and some – even five kilos: “He knows something, tomorrow tomatoes will cost like an aircraft wing, we need to immediately stock up”. The sellers think: “that is our hour of triumph”, the prices are going up again. And then the story repeats. That is how each market works – both a tomato one and a cryptocurrency one. 

If demand exceeds supply, the coin price goes up. You should catch this price movement at the very beginning and buy.

If demand is below supply, the price will fall. It is important to stop holding the coin and get rid of it just in time before your profit vanishes into thin air in a downward trend.

If activity of bulls and bears is approximately at the same level, the price will go in the sideways channel and will remain practically the same.

How to track the activity of bulls and bears

Order book is a cool tool to track activity of buyers and sellers – it shows current orders to buy or sell crypto.

You can find the order book on the right side of the CryptoRobortics terminal screen. In the upper part, you will see red cells – that’s where the bears are, those are the bids for sale. In the lower part – green cells of bulls.

Each line in the book represents an order for a specific price and volume.

The logic of trading with the order book is easy. When the price goes down, there is a crowd in bears’ part of the order book. The coin is sold in big volumes and the prices in the order book go down. At this moment, you should keep an eye on the bulls’ area. As soon as a bid for purchase of a big volume appears in the order book, you better wake up - it seems that someone is going to shear this lamb and turn the trend.

And vice-versa: when you see sudden big sales in the order book, when nothing of bulls’ ill omen was apparent – the trend is likely to change its direction.

How to buy and sell a coin

You can buy or sell a coin directly in the order book, if you see a bid with a suitable price and sufficient volume. There are relevant Buy and Sell buttons.

Alternatively, you may set your own price. To do this you need to open a new order, fill the price and volume of a coin in relevant fields, press Buy/Sell – and your bid will get in the order book for any trader that buys it.

Also, you may set a stop limit. For example, we bought a coin for $100 and do not want to miss its sharp fall. If the price starts going down, you should preferably be in time to fix the losses and sell the coin until your money turns into a pumpkin. Stop loss limits exist for these very cases. These are pending orders: you set a stop-price, below which you do not need a coin to go (say, $95) and the lot’s volume, press Sell button, sit back and enjoy. When the price reaches this value, the request will be automatically sent to the order book. You will get an alert that an H-hour has come and the order was sent for processing.

As you can see – it’s easy as A-B-C and the order book allows you to keep a finger on the market’s pulse. But working just with the order book is no easy matter. Even if it seems that a trend is forming on the market, it can turn out to be someone’s bluff or stupidity. Here, technical analysis of charts comes into play. But we will discuss it in our next letters with you, our dear cryptokittens.

Good luck and profit!