The order book, market depth, commissions, spreads, and slippage

In this section, we will delve into key elements of trading dynamics such as the order book, market depth, commissions, spreads, and slippage. The order book is a vital tool, showing a list of buy and sell orders for an asset. Market depth represents the volume of orders at different price levels, providing insights into supply and demand. Commissions are fees paid to brokers for their services, while spreads denote the difference between the buying and selling price. Lastly, we’ll look at slippage, a phenomenon that occurs when a trade is executed at a different price than expected due to market volatility. Together, these components form the backbone of any successful trading strategy.

I’ve mentioned the term “order book” before but I haven’t explained what it is yet. It’s a very complex topic (entire books have been written about it) and knowing what it is and how it works...