What is the Order Book in Forex?
Quick Answer: The order book lists resting buy and sell orders at different price levels, revealing where liquidity may support or resist price although forex books remain fragmented across venues.
Understanding the Order Book
An order book lists resting buy and sell orders at different price levels. It reveals market depth and potential support or resistance where large interest sits. While centralized exchanges publish books openly, OTC forex books are often visible only through ECN platforms or level-2 feeds.
Using Order Book Data
Traders watch order books to anticipate liquidity pockets and potential stop hunts. A wall of offers above price can cap rallies, while large bids below can slow declines.
Liquidity Map
Combine order book snapshots with price action to map likely reaction zones. Use this to fine-tune entries or plan partial exits.
Limitations
Forex order books are fragmented across venues, so no single feed shows the entire market. Large players also spoof or pull orders before execution. Treat the book as one input, not gospel.
Spoofing Alert
Sudden appearance of massive orders that disappear before trading often signals spoofing. Do not assume those levels will hold.
Related Terms
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