Market StructureBookLimit Order Book
Order Book
The list of resting buy and sell limit orders at each price level on a trading venue.
What Order Book means
An order book aggregates all outstanding limit orders on a venue, sorted by price, with the highest bid and lowest offer forming the top of book. Incoming market orders consume that resting liquidity from the best price outward. On a centralised exchange there is a single authoritative book for each contract, so every participant sees the same picture and reported volume is genuine.
Spot forex has no central exchange, so there is no consolidated order book. Each electronic communication network, bank platform or aggregator has its own book showing only the interest routed to it, and the same liquidity may appear on several venues at once. A depth display on a retail platform therefore reflects one broker's aggregated view, not the whole market. Treat it as an indication of available size rather than a complete map of supply and demand.
Worked example
A book might show 5 million euros bid at 1.08495 and 3 million offered at 1.08505, so a 7 million euro market buy fills 3 million at 1.08505 and the rest higher.
Related terms
- Depth of Market (DOM)A display of the quantity of bids and offers resting at each price level around the current market.
- ECN (Electronic Communication Network)An electronic venue that anonymously matches buy and sell orders from many participants in a shared order book.
- LiquidityThe ease with which an instrument can be traded in size without materially moving its price.
- Over-the-Counter (OTC)Trading conducted bilaterally between two counterparties rather than through a centralised exchange and clearing house.
- Limit OrderAn order to buy at or below a stated price, or sell at or above it, guaranteeing price but not execution.
Frequently asked questions
What does Order Book mean in forex trading?
The list of resting buy and sell limit orders at each price level on a trading venue.
How does Order Book work in practice?
Spot forex has no central exchange, so there is no consolidated order book. Each electronic communication network, bank platform or aggregator has its own book showing only the interest routed to it, and the same liquidity may appear on several venues at once. A depth display on a retail platform therefore reflects one broker's aggregated view, not the whole market. Treat it as an indication of available size rather than a complete map of supply and demand.
What is an example of Order Book?
A book might show 5 million euros bid at 1.08495 and 3 million offered at 1.08505, so a 7 million euro market buy fills 3 million at 1.08505 and the rest higher.
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