Foundations module · lesson 1 of 32
How an exchange matches buyer and seller
Speak the market's language: exchange, candle, long/short, leverage, and costs — without this, the rest of the program reads like spellcasting.
Step 1 · Order book
What you see on screen is the price of the last trade.
Buyers wait in the bids, sellers wait in the asks. The gap between the best prices is the spread.
The order book here is an illustrative example, not the market: there's no public order-book history.
Order bookscheme Step 2 · Market order
A market order eats through levels.
A 1.00 BTC market order ate through two ask levels. The average price is $5 worse than the best ask.
Order bookscheme Step 3 · Limit order
A limit order waits for its price.
BTC: a buy limit order went in at 62 960, on the edge of an FVG. At 02:00 price came back to it, and the entry filled with no slippage.
limit order62 960low 02:0062 957filledyesBTC· 15m · Sep 19–20, 2024real chart · Binance zonesweepMSSentryStep 4 · News
The order book thins out on news.
BTC 1m, May 15, 2024, 12:30 UTC: US inflation data came out. Price moved $1 082 in one minute, and a market order fills far from the screen price.
minute 12:29$71minute 12:30$1 082close63 630News: US CPI, May 15, 2024, 12:30 UTC. The candle doesn't show what filled inside that minute.
BTC· 1m · May 15, 2024real chart · Binance Step 5 · Find it yourself
Where did price come closest to the limit order?
ETH, Oct 30, 2024: the dashed line is a buy limit order at 2 621.7. Tap the candle.
Practice on the chart
This is a Find it yourself task: tap a candle or a level, and the lesson tells you right away if you got it.
Create an accountThis step unlocks after sign-up. Your progress is saved.ETH· 15m · Oct 29–30, 2024real chart · Binance Step 6 · Recap
A market order pays for speed, a limit order waits for its price.
recapA market order pays for speed. A limit order waits for its price and may never get it.
There's no rule for your Pact here: this is how the exchange works, nothing to check.
Two ways to buyscheme
Terms in this lesson
Lessons in this module
Take the lesson with practice
In the app, the lesson checks you on the chart, adds the rule to your Pact, and saves your progress.
Free. The Academy is part of the free plan.