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How Bids and Asks Work

The bid and ask are the basic rails the whole market runs on. If you do not understand them, order flow can feel more complicated than it actually is. The bid is where buyers are willing to do business. The ask is where sellers are willing to do business. Everything else is built on top of that.

Once you understand that split, things like delta, CVD, footprint charts, and aggressive versus passive behaviour stop sounding like isolated jargon and start feeling like different ways of describing the same live fight.

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What bid and ask really mean

The bid is the highest current buy price. The ask is the lowest current sell price. If you want in immediately, you usually cross the spread and trade at the other side. That is where aggression comes in.

So when traders talk about buyers lifting the offer or sellers hitting the bid, they are just describing who is being urgent enough to cross the spread and force the trade.

Why this matters for order flow

A lot of order flow is simply the market organised around this relationship. That is why this page sits so close to market orders vs limit orders, aggressive vs passive participants, and what is delta.

If you know who is crossing and who is waiting, the market becomes much easier to read.

Where people overcomplicate it

The mistake is acting like bid and ask mechanics are advanced. They are not advanced, they are foundational. Traders who skip this usually end up memorising indicators before they understand the behaviour those indicators are measuring.

Get this part right and a lot of the rest of order flow suddenly becomes much less mysterious.