Can a trade occur if buyer and seller both enter market order?

Hello.
1] I am trying to explore how the order book at the exchange works. I know that for every market order, there is limit order to consume.
But I was wondering if there are no limit orders and if two traders want to have a trade (both traders execute market orders in opposite directions) at the same time same quantity then will the trade occur?

2] There are specific levels on charts where we usually see battle between buyers and sellers. I was wondering if there are (maybe?) many market buy orders & market sell orders having transactions that are not actually dealing (getting exchanged against) limit orders?

3] Isn't it a valid trade if two market orders in opposite direction at same price, same time gets executed (without dealing with pending orders)?

Thanks.
-Amit

the market strives for balance, but I wonder why this is so?
and how he is able to comply with this.

Yes, absolutely! Every trade is simply two parties agrreeing on a price but disagreeing on the direction.

If there are no limit orders, the two market orders will be matched up and exchanged. But there are always more limit orders waiting, so it all depends on the details.

If the last price was 1.3050 and the next highest limit sell order is at 1.3054, and then someone comes in with a market buy order (and there are no market sell orders), and if all the limit sell orders at the current price have been filled, then this market buy order will bid the price up to 1.3054 and start taking whatever is offered there. (By the way, if there was still more selling volume at 1.3050, the market buy would be matched against that first. If they market buy fills all of the sell orders at 1.3050, it will bid up to 1.3054. If it fills all of the volume on offer at 1.3054, it will bid up to the next available limit sell price.)

However, if — right at the same time as the market buy order cones in — a market sell order comes in, then they will get matched up and the trade will take place at the last price. I’m pretty sure they will effectively bypass the limit orders because both sides are ready to go and giving the order to buy/sell NOW (at the market price, which is the last posted price).

But if that market sell order is a split second too late, then the market buy order will bid up the price to the next limit sell order: 1.3054. At that point, I believe the limit order will take precedence, and the exchange would only start looking at the market sell order if the entire limit sell volume has been fulfilled at 1.3054. The market sell would get matched with any remaining volume in the market buy order after it has taken out the 1.3054 level.

But you see, if the market sell order is bigger than the market buy order, then sellers will consume all of the demand volume and offer the price down to the next pending limit buy order price.

It’s good that you’re thinking about these things! This is what really moves the market above all else.

Hey Amit!

If there are no limit order then your market order will be never executed and it will be canceled due to lack of liquidity. To better understand how it works you can check testnet on binance futures and pick low volume coins. You will see how it works.

There are no such a thing like "battle" between buyers and sellers. If some hit market buy or sell then limit sell/buy removed from the orderbook. If stop triggered it removes more limit orders, because stops are market orders too. They use limit orders the same way like ordinary market order. That's why price jumps. Big player need to trigger stops, because they are free fuel for them. Limit orders are usually used to stop the price movement, it called "walls". Market orders used to "eat" the liquidity until the stop cascade will be started. After big player successfully eaten some limit orders and start cascade stop eating more limit orders in its favor then after reaching desired level it set the wall to fix the channel, to start fixing profits.

If there are 2 same market orders with same price and size - both will be canceled. Marker order to be filled need limit order. They will not "exchange" each other.