Should we look at "Market depth/ Order book" while Trading ?

Only looking at the "Buyers & Sellers" won't do any good because there is something called "Last traded quantity".

Suppose there are 100 buyers amounting to demand of 1 lakh shares and there are 100 sellers amounting to supply of 2 lakh shares, what would you infer from this data is that supply is greater than demand and you would sell the stock and still the price might go up and you will scratch your head thinking “What the hell just happened”.

I agree that "Total sell quantity was greater than total buy quantity" but at what price the orders were getting matched and rest of the orders were getting rejected ?

Now suppose that at the "Current price the buy quantity is greater than the sell quantity then what would happen" ?

"Rule of economics" says that "Buyers want the lowest price at which they would be willing to buy and sellers want the highest price at which they would be willing to sell".

So, if at the "Current price the buy quantity is higher than the sell quantity then the buyers would have to accept the shares at a higher price than the current price which would increase the last traded price".

This data keeps changing by the second.

In my opinion, you should try to understand this behavior only "When the price is trading near a support or resistance to help you in making a better decision".

This is a very common mistake that people make and it costs them "A ton of money".

It is against the principle of "Protecting your capital".

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