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2Grade 2: How Prices Move
Market Foundations + Forex Mechanics · How Prices Move

Order book and market depth

Identify how bids, asks, and depth shape the next available price.

3 min read+25 XPLesson 12 of 110
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Market Foundations + Forex Mechanics

How Prices Move

Lesson 12 of 11011%
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Lesson 12 of 110Market Foundations + Forex MechanicsHow Prices Move

Today's tiny win: make one idea click.

Identify how bids, asks, and depth shape the next available price.

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The price ladder under the chart

The order book is the market's waiting room. It shows buy orders, called bids, sitting below the current price, and sell orders, called asks, sitting above the current price. The best bid is the highest price a buyer is currently willing to pay. The best ask is the lowest price a seller is currently willing to accept. The gap between them is the spread. When you place a market buy, you usually hit the best ask. When you place a market sell, you usually hit the best bid.

Wick holds a shield labeled thick bids that blocks falling candles, showing that lots of waiting buy orders below price can slow a drop.Falling priceFall slows downThickbids
Wick saysThick bids below price can slow a fall, like a cushion of waiting buyers.

Market depth means how much size is waiting at each price level. If a lot of sell orders are waiting above price, buyers may need serious demand to push through. If the ask side is thin, a few aggressive buyers can move price faster. The same works in reverse. Thick bids below price can slow a fall, while thin bids can let price drop with less resistance. This is why price sometimes glides and sometimes jumps.

Wick points at a practice chart that jumps sharply after a calm stretch labeled thin depth, showing that price moves fast through areas with few waiting orders.Thin order bookPractice chartPrice jumpsThin depth
Wick saysWhen few orders are waiting, a few eager buyers can make price jump fast.

Most beginners only see candles, but candles are the result. The order book is closer to the process. In some markets you can see more direct depth than in others, and forex depth shown to retail traders is usually only a slice of the full market. Still, the concept matters everywhere. Price moves by eating through available orders. If demand consumes the offers above, price rises. If supply consumes the bids below, price falls.

A green fact card says orders can be canceled or moved and a coral myth card says the order book is a promise, teaching that depth can change in a blink.FactOrders can becanceled or movedMythThe order book isa promise
Wick saysThe order book is not a promise. Orders can vanish before you react.

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0 / 3 answered

1. Where do bids usually sit in an order book?

2. Why can price move quickly through a thin area of depth?

3. What is the best ask?

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