Market depth is an electronic list of buy and sell ako spravne obchodovat forex, organized by price level and updated to reflect real-time market activity. Most of today’s trading platforms offer some type of market depth display that allows traders to see the buy and sell orders waiting to be executed—not just the best bid and ask prices, but the bids and asks on either side of the market—as well as the size of all the bids and offers. All of this information can be useful to traders because it shows not only where price is now, but where it is likely to be in the near future. Here, we look at market depth, from the basics to how you can add market depth to your trading toolbox.
Market depth displays information about the prices at which traders are willing to buy and sell a particular trading symbol at a single point in time. Because market depth is in real time, it changes constantly throughout the trading session. On thinly traded instruments, the bids and offers may update every few seconds, minutes or even hours. Regardless of how frequently new bids and offers come to the market, market depth shows the different prices and the number of orders lined up at each price to buy or sell.
These are the same data that would appear on a Level II window or DOM, just presented in a different, more visual manner. The size of each green bar reflects the relative number of shares, contracts or lots that buyers would like to purchase. The vertical location of these bid bars correlates to the specific price at which traders are interested in buying. The top green price bar is known as the inside bid and represents the highest price at which there are interested buyers. This can be thought of as the wholesale price for the symbol. The size of each red bar reflects the number of shares, contracts or lots that traders would like to sell, and the vertical location corresponds to the specific price at which traders are currently interested in selling. The lowest red bar is known as the inside ask and represents the lowest price at which there are interested sellers, or the current retail price for the symbol.