Item watch notifies you when someone bids on the auctions that you have added to your Item Watch.

All bids are "Proxy" bids.

This mean that you can bid the amount you are willing to spend and the system will automatically bid for you up until the point where you have the maximum bid OR your maximum limit is reached.

For example:

If the current auction is for $100  and you bid $120, the system will bid $105 and see what the ourcome is. Then if you are not the highest bidder it will try $110, $115, and finally $120.