Understanding depth charts on Gdax (coinbase exchange)
If you’re a newbie, understanding depth charts on Gdax can be overwhelming. Don’t be stressed anymore. In fact, by the end of this post, you’ll be able to teach your friends and make better decisions.
Let’s take a look at a Litecoin (LTC) depth chart.
The key elements you see right away are the market price, the buying orders, the orders and the walls and X/Y axis.
The market price
First, at the center, where the green and the red lines meet, you have the market price.
The green side represents the number of coins that have buy orders at or above the gray centered vertical line.
Similarly, the red side represents the number of coins that have sell orders at or below the gray centered vertical line.
The vertical steps/lines on both sides are walls. For instance, on the green side, a lot of coins will be purchased if the price falls to $43 and $42.60. In the same way, on the red side, a lot of coins will be sold if the price goes up to ~$43.90 and $44.
Y and X
Finally, the Y axis on the edges represents the number of coins that need to be bought or sold to reach the price indicated on the X axis.
For example, it would take a little more than 3000 LTC to move the price from $43.2 to $42.6 on the green side and another 3000 LTC to from $43.40 to $44 on the red side.
See! Reading depth charts are not that complicated. In fact, now it will take less than a minute to identify the key elements. Remember markets move fast and for this reason, you have to think fast.