Bids, asks, and the spread

An order book is a live list of everyone's pending buy and sell orders for an asset, organized by price. The bid side shows buy orders, demand, ranked from highest to lowest price. The ask (or offer) side shows sell orders, supply, ranked from lowest to highest.

The gap between the highest bid and the lowest ask is the spread. A tight spread on a heavily traded pair signals a liquid, efficient market. A wide spread on a thin, low-volume pair signals it will cost you more to enter and exit a position.