Combined Books

Definition

Combined Books represent the total liquidity available in the order book across multiple exchanges, encompassing both bids (limit buy orders) and asks (limit sell orders) at various depth levels. These depth levels typically include:

• Quote: Best bid and ask prices.

• 1%, 2%, 5%, 10%, 20% Depth: Liquidity within a percentage range from the mid-price.

• Full Book: Entire visible order book liquidity, covering all price levels.

Key Insights:

• Total Market Liquidity: Measures the aggregated buying and selling power across exchanges.

• Depth Analysis: Highlights liquidity concentration at different price ranges.

Why It Matters:

• Market Stability: Higher liquidity generally indicates more stable price movements and reduced slippage.

• Volatility Risk: Thin liquidity at key depth levels may signal potential price swings.

The Combined Books indicator provides a comprehensive view of aggregated market liquidity, enabling traders to make more informed decisions about entry, exit, and risk management based on order book dynamics.