In the meantime the sellers will put their selling orders on higher prices and buyers will chase the lowest rising sell order to guarantee their trade and DGB will pump, until market reaches equilibrium. People will believe that the price will rally and try to buy DGB as soon as they can, so they will put the buy order above the previous one. So, someone will say, “I will buy at 439”, another will come and say “I will buy at 440". So, buyers will believe that the price will increase and if they will buy at 439, they can sell it higher in the future. In a price increasing scenario, market needs some environmental factor which triggers it in a way that DGB appears more “charming”. There needs a concession in order to have a compromise. People who don’t know each other will fight for buying or selling on web. Let the war beginn!! This is the most fun part of the trading for me. So, there will be no exchange, because sellers don’t want to sell under 439 sats and buyers don’t want to buy above 438 sats. On the other hand the highest buying offer is at the price of 438 satoshis and the total demanded DGB at that price is 88362. The cheapest DGB available costs 439 satoshis, and only 2886 of DGB are selling on that price.
On the Sell Orders, we see people who are trying to sell DGB for BTC and on the Buy Orders we are seeing people who are trying to buy DGB with BTC. The above picture is showing us the buyers and sellers. Let’s go back to our shopping mall analogy we are visiting the Polneix shopping mall and entering the DGB/BTC shop. Sum shows the cumulative amount of BTC accumulated at that price.BTC shows the amount of BTC accumulated at that price.(It’s the total value, not a single person’s offer).DGB shows the amount of DGB accumulated at that price.(It’s the total value, not a single person’s offer).Price shows the offered price of 1 DGB in BTC.One will say it costs 10 dollars, other will come and say 9 dollars, other will come and say 1. The sellers will race with each other to sell the pearl. Scenerio 2: There are ten seller and two buyers. One will say 10 dollars, other will tell 15, other will tell 100. The buyers will race with each other to buy the pearl. Scenerio 1: There are two sellers and ten buyers. There are people who are trying to sell a pearl and people who are trying to buy a pearl. If the quantity demanded> the quantity supplied then the price will rise, vice versa, price will fall.It adjusts to bring the quantity supplied and the quantity demanded into balance. The price is the tool through which the market is cleared.Quantity demanded is the amount that buyers are willing and able (have the resources - money) to purchase.Quantity supplied is the amount of a good that sellers are willing and able to produce / bring to the market.Today, we have computers and internets running the exchanges in the same mentality. This is how an exchange works, like a bazaar, like a shopping mall. The graphs are made on the blackboard with chalk manually. Phones and mails are the ways to communicate with outside world. People are trying to buy/sell stocks via direct interaction. The trading floor in the photograph is the shopping mall in our example. The photograph is actually similar to our example. It is one of the early time photographs of NYSE and a crucial photograph to understand the dynamics of trading. The above photograph was the first thing thought to me during my work in an asset management company by my manager. In this case our shopping mall is the Exchange which embodies the shops and the shops are the Markets where buyers and sellers are gathered. For selling it, you again will visit the shop and this time you will trade your Bitcoin with USD. Then you will buy Bitcoin by trading your USD. Those shopping malls have only crypto shops, such as one selling Ethereum for Bitcoin, one selling ZCash for Bitcoin, one selling Monero for USD, one selling Bitcoin for USD… So, for buying Bitcoin, you need to visit the shopping mall and go to the Bitcoin/USD shop. (I’ll specifically talk about crypto exchanges, stocks are different in some ways) Think that you are living in a crazy town which has several crypto shopping malls called Polneix, Binenace, KoCoin, Bitirex, CoinBese … swh. A market is a group of buyers and sellers of a particular good or service.Īn analogy is always better to understand the concept, so let’s go with a one.In the Crypto exchanges you can trade coins and tokens. In FOREX you can trade foreign exchanges, commodities, indices. For example in NYSE you can trade options, equities etc.
An exchange is a marketplace in which financial instruments are traded.
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