How to Read a Depth Chart Gdax
How does a depth chart work?
Ameliorate your understanding of the market with depth charts
Written by Daniel H
Updated over a week ago
Depth refers to the power of a market for a specific nugget to sustain large orders of that asset without the nugget'southward cost moving significantly. The more open limit orders there are on both sides of an orderbook for an asset, the more than depth that book has.
A depth chart is a graphical representation of buy and sell orders for a specific asset at various prices. A depth chart illustrates both sides of supply and need to show how much of an nugget you can sell at a particular price signal.
A depth nautical chart is split in the middle, which is the price of the asset during the final trade. Information technology is also organized across the bottom past price.
On the left (greenish) side yous have the lowest buy order (price) that buyers hope the asset will become so they tin purchase it affordably.
On the right (red) side you lot have the highest sell order (price) that sellers hope the asset will become so they can sell information technology for a large profit.
Overlapping Values are Arbitrage
Notice the overlap in the dark-green and scarlet lines. In this example, in that location are buyers willing to buy at a toll up to $5,996/BTC and sellers willing to sell at a price down to $5,983/BTC.
The overlap between $five,996 and $5,983 is possible considering of SFOX's aggregated orderbook from many global exchanges and liquidity providers and is an arbitrage opportunity to SFOX traders.
Buy Walls
Buy walls are a large number of buy orders, typically placed on the order book all at once, below the electric current cost.
Notice the large number of light-green bids/buys on the left side of the paradigm at $671/BCH.
Sell Walls
Sell walls are a big number of sell orders, typically placed on the order book all at once, to a higher place the current price.
Detect the big number of red asks/sells on the correct side of the image at $half dozen,000/BTC.
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Source: https://intercom.help/sfox-trading/en/articles/3864391-how-does-a-depth-chart-work
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