What is an Order Book?

An order book on the Exchange Platform is simply a list of buy and sell orders placed by market makers for a specific trading pair such as XCM/EUR. Order books are split into two sections:

1. Bids (buyers) in green

2. Asks (sellers) in red.

In the middle of these highlighted in yellow, we can see the “mid-price”. This is simply just the price in the middle of the lowest ask and highest bid.

Example of the BTC/EUR order book

How to find an Order Book

Firstly, you need to go to either the Exchange or Margin platform, depending on which platform you are using. 

On the Exchange Platform 

On Desktop or Browser	On the Mobile App
1. From your Dashboard, click on Exchange. 2. Select your trading pair. 3. Find the order book on the left-hand side of the price chart.	1. Tap on the menu icon (the 3 lines) in the upper left-hand corner. 2. Tap on Exchange.   3. Select the pair of the book by tapping on the left-facing arrow in the upper left-hand corner. 4. Tap on Order Book underneath the price chart.

On the Margin Platform

Anyone can be a “market maker” by simply placing a Limit Order. Whilst your limit order is active, this will appear in the order book underlined. In the example below, we have placed a bid (buy) for ETH at a price of 1766.0013.

As you can see, your active order will appear on the green side as it is bid, and you are saying you want to buy ETH for this specified price. Essentially, your order is placed in a queue until it is filled by another trader, or if you decide to cancel or edit it.

Spread

When we are referring to the spread of an order book, this can easily be described as the difference in price between the lowest ask and highest bid. The spread can be displayed as an absolute value which is €0.9085, or as a % value which is 0.05% as shown in the example below.

Whilst it is common to see either one of the other, Coinmetro displays both for transparency.

Cumulative Orders

Coinmetro allows users to control how they visualize the order book in multiple ways.

Firstly, you are able to view all the orders in the book cumulatively. This means that instead of seeing multiple levels and the amount at each price level independently, you can see the sum as you look up the book. This can be achieved by first clicking on the 3 dots next to Order Book, and then clicking the toggle to activate cumulative orders.

This feature is extremely useful in case you are placing a market order and the order book is fairly thin/illiquid. You will be able to see exactly how your buy or sell order will impact the price of the asset you are trading, which can help you determine if you wish to wait/place a smaller or larger order, or use another order type such as a limit order.

Cumulative Volume

Cumulative volume essentially works the same as the cumulative order book; but instead of showing the values cumulatively, it only shows the volume bars (the red and green bars in the book). This can be achieved by clicking the 3 dots next to Order Book as shown above, and then clicking the toggle to turn on Cumulative Volume.

This feature can be very useful at a glance to see where there are larger orders or 'holes' in the order book.

Coinmetro’s Demo Platform is always available if you would like to practice without risk. Please note that this article is not to be seen as trading or financial advice. It is for educational purposes only.