Basics
In one sentence
The live list of resting buy and sell orders at each price, showing where the market is currently willing to transact and in what size.
Bids sit below the current price, asks above it. The depth at each level tells you how much size the market can absorb before price has to move, which is the raw material behind the word "liquidity".
Order books can mislead. Large resting orders can be pulled in an instant, and on some venues they are placed precisely to be seen. Treat visible depth as information about intent, not a promise.
The mistake it causes: trading a wall as if it were support. Walls disappear.
Bids sit below the current price, asks above it. The size resting at each level tells you how much the market can absorb before price has to move, which is the raw material behind liquidity. The top of the book gives you the bid and ask; everything beneath it tells you what happens to a larger order.
Resting orders can be cancelled in milliseconds, and on many venues a large visible order exists precisely to be seen. A "wall" is not support; it is a claim that someone intends to buy, and that claim can evaporate the moment price approaches. Traders who treat walls as levels get taught this repeatedly.
| What you see | What it might mean |
|---|---|
| Large resting bid | Real demand, or bait that will be pulled |
| Thin book both sides | Any size will move price |
| Stacked small orders | Often algorithmic, replenishing |
Because forex is decentralised, there is no consolidated order book. What your platform shows is your broker's view, derived from its liquidity providers. This is one of several reasons forex volume and depth data should be treated as a proxy rather than fact. See volume.
Not for prediction. For execution: deciding whether to use a limit or a market order, judging how much size the book can take, and understanding why a particular level keeps attracting price. Those are mechanical questions and the book answers them well.
This term is explained in context in the primer .
More in Basics: Spread, Leverage, Margin, Market order.
Education only, not financial advice. Trading is high risk and most retail accounts lose money.
