Order Book Depth
The Order Book Depth Indicator on TRDR provides a real-time visualization of market liquidity imbalance, showing the distribution of buy (bid) and sell (ask) orders at different price levels. It helps traders assess market depth, supply and demand imbalances, and potential support/resistance zones.
Key Features:
How to Use It:
Thicker order book walls suggest strong support/resistance levels.
Disappearing liquidity may indicate fake orders (spoofing) or upcoming volatility.
By combining the OBD Indicator with Open Interest, Order Book Changes widget and Trades widget, traders on TRDR gain a comprehensive view of market sentiment and liquidity dynamics.
Bids and Asks The foundation of the overlay lies in the order book depth (OBD). Let's explore its functionality:
Overrides: If you choose 'spot,' the OBD data will only appear when you select a specific spot market. Different settings for different markets can be beneficial due to differences between Spot/Perpetuals/Futures markets.
Using these settings, your chart will display information like:
1.2 Delta Delta: This term signifies the difference between two values. Calculation: Bids - Asks. Delta = Bids (959) - Asks (285) = ₿ 674 more on the bid side, 1%-2.5% from the best bid and ask.
1.3 Ratio Ratio: A ratio demonstrates the comparative quantities of two variables. Using the bids and asks, a ratio can be calculated as followed: (bids 959 - asks 285) ÷ (bids 959 + asks 285) = 0.54.
Alternatively, this can be expressed as bids - asks = -₿ 674 (delta) the total = 1244, so we divide the delta 674 ÷ total 1244 = 54% buyer dominance in the 1-2.5% range.
Luckily our users don't have to go trough those calculations, our users can just enable the ratio setting under the style section😜.
1.4 Totals (liquidity) Total: Total = Bids + Asks. For instance, Bids ₿959 + Asks ₿285 = Total ₿1244.
1.5 Order book depth aggregation
This feature displays the total from all exchanges for the chosen markets. You can select which exchanges to include in the aggregation, use markets (Spot/Perpetuals/Futures) of the same type or compare different markets, and decide which exchanges are to be included in the aggregation, for example, Binance & Coinbase. Aggregated order book data is expressed in $ instead of ₿ or ETH.
The image above offers a brief summary of all concepts explained so far. Now, let's apply the calculations for Binance (usdt+tusd+busd) and Coinbase on the spot markets: Bids: $25.641M Asks: $20.667M Delta = bids - asks = - $4.974M Ratio = bids - asks ÷ bids + asks = -10.74 Total = bids + asks = $46.308M
Below another example of spot + perpetuals, which paints a significantly different picture compared to the first example (spot). This explanation covers every function of the order book depth indicator.
