Reading the Order Book: Bid Direction vs. Bid Depth

The order book is the most real-time data source available to a trader. Every bid and ask represents a commitment of capital — someone is willing to buy or sell at that price right now. Most retail traders look at the depth of the book (how many shares are on the bid vs. the ask) and conclude that more bids = more demand. But this is often wrong.

The more important signal is bid DIRECTION — is the bid price moving up or down across consecutive reads? A bid that's shrinking in depth but climbing in price is actually a buy signal. It means resting orders are getting filled (someone is buying everything available at each level), and the market maker is raising the bid to find more sellers. That's demand, not weakness.

The iMYNTED terminal classifies order book states into four categories: CLIMBING (bid price stepping up — buy signal), STACKING (bid flat but depth building — accumulation), FADING (bid price AND depth both dropping — distribution), and REBUILDING (bid repriced lower but depth growing — buyers waiting at lower levels).

The most powerful single-frame signal is 'bid at last print' — when the bid is sitting at or above the last traded price with a thin ask above. This means buyers are willing to pay the market price and there's very little standing between the current price and a breakout. Combined with a catalyst, this is the setup that produces the fastest moves.