kuCoin Basics, part 4: understanding the order view

By estrenoscinehoy.com | It's all about crypto | 2 Apr 2021

Hey mates!

Let's go to talk about how to understand the graphics into the kuCoin trade view.

First of all, you have to understand a basic concept about trading:

you can sell something when somebody is willing to buy or pay you an amount of money for that thing. So what's the price of the things? the price of the things is the price when somebody pays you for that thing at that moment. When the transaction is committed.
It's said that there's a 'match' when a seller and a buyer confirm a transaction.

For instance, I'm trying to sell a car and I say that the car has a starting price of 5k euros. But if I ask you... how much the car cost? you don't know it in reality. Because imagine that somebody wants the car, speaks with you, and offers you 4k euros for the car. If you accept the transaction, the value of the car at this moment is 4k, not 5k. So the price of the things is the paid price in a given moment. Do you see the idea?

Order book

When you go to the kuCoin trading view, you can see the selling and buying orders. These orders are the selling and buying price for trading some crypto. What does it mean? It means what people are willing to buy or sell the crypto.

On one side, in red, the owners of the cryptos (or goods) enter the selling orders with the desired prices to sell into the kuCoin trading platform.
On the other side, in green, the buyers enter the buying orders with the desired prices to buy into the kuCoin trading platform.

Nothing strange up to here.

What is the most important here to keep in mind?

The most important thing here, it's to understand the magic behind the price for an specific crypto. The real price or transaction price, is the order price when occurs a match between a selling order and a buying order. The system is matching the selling and buying orders all the time, so the price is changing at every moment. The match uses to be with the orders of the lowest selling price and the highest buying price. Once the system matches two orders, keeps on with the next match, and so on. The current market price is changing and changing.

What is doing the price is increasing/dropping?

When the demand for a cryptocurrency is increasing, the price is rising.
When the offer for a cryptocurrency is increasing, the price is dropping.

Translating these ideas to the order book

Look at the market depth graphic. There you can see a graphic in red and another in green. These two graphics are the selling and buying orders respectively. You can see the red over the green, and you can see a point just where both graphics are connecting. This point is the price market point, is where the selling and the buying orders match. Really important place.

this point will move up if there's more demand than offer
this point will move down if there's more demand than offer

How can we predict the price by looking at this graphic?

Easy:

if you see the red graphic wider than the green graphic, it means that there is a huge offer, so there is a big pressure to sell, and the price is not going to increase or it's going to drop.
if you see the green graphic wider than the red graphic, it means that there is a huge demand, so there is a big pressure to buy, and the price is going to increase or it's not going to drop.

To summarize

If you can understand more or less how is working the trading, matching orders, you can understand the 'Market graphics' and 'the order view.' With these tools, you can understand more or less how the pressure in the market is, I mean, If there are more demand or more offers, and after that, you can decide if you want to buy, sell or hold your cryptos in a given moment.

That's all!

Let me your comments below!

Thanks for reading me!