In this tutorial I will show you how to use a Depth chart to evaluate the last buying and selling price, also called the buy/sell spread. This can be helpful when trying to establish what price per coin you should set when trying to buy or sell a coin.
After you’ve accessed the platform for the exchange pair that you want to work with, press on Depth button indicated by the arrow.
🇬🇧 TUTORIAL: How to use the Depth chart to check the latest buying / selling price http://www.drcrypto.co.uk/tutorial/using-the-depth-chart-to-check-the-buying-selling-price/🇷🇴 TUTORIAL: Graficul de adâncime pentru evaluarea prețului de vânzare / cumpărarehttp://www.drcrypto.ro/2017/12/02/using-the-depth-chart-to-check-the-buying-selling-price/
Posted by Doctor Crypto on Saturday, 2 December 2017
Once you changed to the Depth chart, you can:
- zoom out to see how large the buying (green) and the selling (red) orders are, which is indicated by how tall the columns are
- zoom in to get a very close look at the last buying price and last selling price and see what the spread is between (the difference between the buying and the selling price as a % – the buy / sell spread) – as shown in the image below:
What this means at this in practical terms is that if you were to set a buying order which matches the last selling price, the order will get fulfilled straight away. So looking at the image above, we can see that the lowest selling order is for about 5,000 QSP coins at 0.00024879 ETH. That means that if you want to buy 2,000 QSP coins and are willing to pay 0.00024879 ETH per coin, the order will be closed straight away because there is someone who is willing to sell you that amount (the lowest selling order in the image above is for about 5,000 QSP coins at 0.00024879 ETH, so that’s enough to cover your demand). However, in the same way, if you wanted to buy 20,000 QSP coins at 0.00024879 ETH, the lowest selling order being about 5,000 QSP coins at 0.00024879, that means that your order would only be partially filled, because you are taking the coins from the lowest selling order which would only cover 5,000 QSP out of the 20,000 QSP coins that you want to buy at your price. So you get about 5,000 QSP coins but you will still have an open order for the rest 15,000 QSP coins at a price of 0.00024879 ETH – if the next selling order is willing to match your price and enough coins, then it will be completely filled and closed.
A good analogy is this: let’s say you want to buy 10 phones at a price of £900 each. So you’re looking on the market and there are 3 guys who sell a phone for £900 each but then the next best offer is 7 guys who sell a phone for £950. So your order gets partially filled – you will buy those 3 phones but you will still be looking for 7 phones at £900 each. However, the next best available offer is 7 phones at £950 – but you don’t want that, you only want to pay £900 per phone not £950. So you will have to wait until the price drops down – either because those 7 guys decide to decrease the price or because someone else comes along who is willing to sell you 7 phones for £900 each.
So when deciding to set a buy or sell order, depending on how urgent it is for you to get those coins, you can look at the depth chart and see what the latest prices are and depending on that, you can adjust the price that you are willing to pay per coin in order to get the best deal.