The order book is a live list of every buy and sell order waiting to be filled, arranged by price. Sellers sit above, buyers below. Where they meet is the current market price.
The bid is the highest price any buyer will pay right now. The ask is the lowest price any seller will accept. Buy at market and you pay the ask. Sell at market and you receive the bid.
The spread is the gap between the bid and the ask. You pay it the moment you open a trade, which is why every new position starts slightly negative.
Liquidity describes how easily you can trade without moving the price. A liquid market has many orders at every level, so even large trades fill cleanly and spreads stay tight.
An illiquid market has gaps in its order book. A single order can push the price, and the spread widens.
Slippage is the difference between the price you expected and the price you got. It happens when price moves between your click and the fill, or when there aren't enough orders at your price.
Spread, liquidity and slippage aren't rare events. They are part of every trade. A plan that ignores them looks better on paper than it performs in practice.
Include the spread in your targets, and avoid fast or thin markets unless your plan is built for them.
What happens between your click and your fill.
