Taker Buy Sell Volume/Ratio
This concept is often confusing because every trade requires both a buyer and a seller of the given asset. However, depending on whether the order taker is buyer or seller.

Definition

This concept is often confusing because every trade requires both a buyer and a seller of the given asset. However, depending on whether the order taker is a buyer or seller (whether a transaction occurs at the ask price or the bid price), you can distinguish between long volume from taker seller volume.
Note we unify the unit of return value to USD for each exchange where its contract specification may vary.

Interpretation

Taker and Maker

Taker: Taker trade refers to an order that is traded before going on the order book. All market order trades are takers. Maker: Maker trade refers to an order that goes on the order book (e.g. a limit order). These orders add volume to the order book, helping to 'make the market'.

Bid and Ask Price

A maker who wants to buy an asset is willing to place limit orders in the order book at a lower price, and a maker who wants to sell is willing to place orders at a higher price. The bid price is the highest current price a buyer is willing to pay for an asset. The ask price is the lowest current price a seller is willing to sell a security for. There is always a bid price and an ask price in an actively traded asset which continuously fluctuates.
When takers buy at the bid price set by makers, the amount of assets traded between the two contributes to the taker seller volume. This volume is selling volume because it has the potential to move the price down. When takers sell at the ask price, the amount of assets traded contributes to the taker buy volume.This volume pushes up the price.
If the current market has more taker buy volume than taker sell volume, it means there is a tendency to increase the price as more trades occur at the ask price. When the current market has more taker sell volume than taker buy volume, it means there is a tendency to push the price down since there are more traders selling at the bid price.
Last modified 9mo ago
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