Market Depth (DOM): What It Is and How Traders Can Use It

Market depth is a powerful tool traders use to analyze supply and demand trends. This guide explains how it works and how to integrate it into your trading strategy.

What Is Market Depth?

Also known as DOM (Depth of Market) or order book, market depth displays buy and sell orders for an asset at different price levels. It helps traders gauge liquidity and identify support/resistance zones.

👉 Discover how DOM enhances trading decisions

How the DOM Works

For an asset priced at $1, the DOM shows:

• Bid orders: Buyers willing to purchase at $0.99, $0.98, etc.
• Ask orders: Sellers offering at $1.01, $1.02, etc.

This reveals real-time supply/demand without switching tabs.

Getting Started with DOM

Steps to Access Market Depth:

1. Connect to a Tier 2 data-supported broker.
2. Click the Trade button in your trading panel.
3. Select the DOM tab to view the order book.

Note: No data? Ensure your broker supports the asset.

Key Features of DOM

| Element | Description |
|---------|------------|
| [1] | Active orders |
| [2–3] | Ask/Bid volumes |
| [4] | Order entry cells |
| [5] | Cancel all orders |
| [6] | Price-centering button |

Data Sources in DOM

DOM data comes from your broker but may slightly differ from chart data due to separate feeds. Use the [6] center button to align prices dynamically.

Placing Orders via DOM

Order Types:

1. Market Order: Click Buy/Sell Mkt.
2. Limit Order: Click a price cell (left for buy, right for sell).
3. Stop Order: Hold Ctrl (Win) or Command (Mac) + click.

Modifying/Canceling Orders

• Drag orders to new price levels.
• Cancel single orders: Click the "✕" next to the order.
• Cancel all orders: Press CXL ALL.

Color Codes in DOM

| Color | Order Type |
|-------|-----------|
| Green | Active limit orders |
| Red | Active stop orders |
| Yellow| Stop-limit orders |

Managing Open Positions

• Long positions: Blue field (price expected to rise).
• Short positions: Red field (price expected to fall).
  Use [9] Close or [10] Reverse to exit positions.

FAQs

1. Why is DOM important?

DOM reveals liquidity and potential price movements.

2. Can DOM predict price changes?

While not a crystal ball, DOM shows where large buy/sell orders cluster, hinting at future support/resistance.

3. How do I fix missing DOM data?

Switch brokers or confirm asset compatibility.

👉 Learn advanced DOM strategies here

Final Tip: Combine DOM with technical analysis for sharper trades. Always test strategies in a demo account first!