Recently, many beginners have been confused by the data of internal and external plates when watching the market. Actually, understanding what internal and external plates mean can be very helpful for short-term trading.

Simply put, the core of internal and external plates is to distinguish who is actively trading. When you are eager to sell and directly click the best bid price to execute, this trade counts as an internal plate, indicating that sellers are more urgent. Conversely, if you are eager to buy and directly click the best ask price to execute, this trade counts as an external plate, indicating that buyers are more urgent. Therefore, more internal plates generally suggest a strong bearish sentiment, while more external plates indicate a strong bullish sentiment.

When looking at the five-level quotes, the green on the left is the five best bids, and the red on the right is the five best asks. These are all pending orders waiting to be executed. But note that pending orders can be withdrawn at any time and may not necessarily be executed.

Investors often pay attention to the internal-to-external plate ratio, which is the internal trade volume divided by the external trade volume. A ratio greater than 1 indicates more internal plates, suggesting a stronger bearish market sentiment; a ratio less than 1 indicates more external plates, showing stronger buying interest. When the ratio equals 1, it usually means a balanced force between bulls and bears, often a consolidation phase.

However, be cautious. Although the concept of internal and external plates is simple, they can be easily manipulated by major players. Sometimes, you see a particularly large external plate with the stock price not rising; this could be a deliberate setup by the main force to place sell orders to attract retail buyers, secretly offloading shares. Conversely, if the internal plate is large but the stock price rises, it might be the main force placing buy orders to deceive retail investors into selling, while secretly accumulating shares.

Therefore, it’s best to combine internal and external plates with trading volume, support and resistance zones, or even company fundamentals. Relying on a single indicator can lead to wrong directions. My approach is to buy at support zones during dips and sell at resistance zones during rallies, while also checking the internal/external ratio to confirm the urgency of buying and selling.

In fact, no single indicator in financial investment can be all-powerful. Internal and external plates are just part of technical analysis tools. The most important thing is to understand market psychology and combine multiple indicators for comprehensive judgment. On Gate, you can see real-time order books of various assets. If you want to practice these skills, you can try on a demo account, experiencing the real trading rhythm without risking real money.