1. Bid (Demand) X Offer (Availability)
The bid price is the highest publicized price a buyer is posting an order to buy at.
The offer price is the lowest advertised price a seller is posting an order to sell at.
2. A trader can choose to buy at the ask price, or sell to the bid price. This will create an instant transaction.
3. A trader may also choose to put out a bid or offer at any price they desire, but there is no guarantee another trader will transact with that order.
4. Assume someone is selling 1 BTC at $19.999. If someone buys it, it will no longer be available. The next offer may be to sell 1 BTC at $20.100. If someone buys, or the seller cancels their order, then that order disappears and the offer price moves to the next available price someone is selling at, let's say $20.150.
5. If the buying was big enough to remove all BTC offers up to $20.150, then price moves up.
6. The same thing happens on the bid.
Transactions may occur at a furious pace. People are biding and offering at different prices, in different quantities, and they can cancel or change those orders at any time causing the bid and ask to change.
Other traders may not post bid or offers, but rather simply transacting at the bids and offers currently available.
7. When transactions occur at the offer, this is called buy volume, and when transactions occur at the bid this is called sell volume.
When a sell order comes into the market that is bigger than the number shares available at the current bid, then the bid price will drop, because all those shares at the current bid are absorbed by the selling.
When a buy order comes into the market that is bigger than the number of shares available at the current offer, then offer price will move up, because all those shares at the current offer are absorbed by the buying.
8. Price can move quickly or slowly depending on how aggressive the buyers and sellers are. The price can move very quickly is someone puts out a big market buy/sell order.
GOOD LUCK. GOOD PROFIT.
The bid price is the highest publicized price a buyer is posting an order to buy at.
The offer price is the lowest advertised price a seller is posting an order to sell at.
2. A trader can choose to buy at the ask price, or sell to the bid price. This will create an instant transaction.
3. A trader may also choose to put out a bid or offer at any price they desire, but there is no guarantee another trader will transact with that order.
4. Assume someone is selling 1 BTC at $19.999. If someone buys it, it will no longer be available. The next offer may be to sell 1 BTC at $20.100. If someone buys, or the seller cancels their order, then that order disappears and the offer price moves to the next available price someone is selling at, let's say $20.150.
5. If the buying was big enough to remove all BTC offers up to $20.150, then price moves up.
6. The same thing happens on the bid.
Transactions may occur at a furious pace. People are biding and offering at different prices, in different quantities, and they can cancel or change those orders at any time causing the bid and ask to change.
Other traders may not post bid or offers, but rather simply transacting at the bids and offers currently available.
7. When transactions occur at the offer, this is called buy volume, and when transactions occur at the bid this is called sell volume.
When a sell order comes into the market that is bigger than the number shares available at the current bid, then the bid price will drop, because all those shares at the current bid are absorbed by the selling.
When a buy order comes into the market that is bigger than the number of shares available at the current offer, then offer price will move up, because all those shares at the current offer are absorbed by the buying.
8. Price can move quickly or slowly depending on how aggressive the buyers and sellers are. The price can move very quickly is someone puts out a big market buy/sell order.
GOOD LUCK. GOOD PROFIT.
Note
The BIG QUESTION is? Why orders are placed on bid or ask, and what is going to be the reaction of the price on a medium and long term picture?
When to enter the buy and place a sell.?
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.