GoCharting Docathlon

Depth of Market|DOM


Depth of Market, aka the Order Book, is a window that shows how many open buy and sell orders there are at different prices for a security. Let’s say the current price is $1, the DOM will show how many orders there are at $0.90, $1.05, etc. It shows where the supply and demand levels are.

DOM comprises of Limit Orders which are consumed by Market Orders

Basis of ORDERFLOW ANALYSIS

It is based on the number of open buy and sell orders for a given asset such as a stock or futures contract. The greater the quantity of those orders, the deeper or more liquid, the market is considered to be.

Depth of market data is also known as the order book since it consists of a list of pending orders for a security or currency

To activate the DOM, click on the DOM tab in the left side panel

DOM in GoCharting

Understanding DOM

By measuring real-time supply and demand, market depth is used by traders to assess the likely direction of an asset’s price. It is also used to gauge the number of shares of the asset that can be bought without causing its price to appreciate.

If a stock is extremely liquid, it has a large number of both buyers and sellers. A buyer can purchase a large block of shares without causing a substantial stock price movement.

However, if a stock is not particularly liquid, it doesn’t trade as constantly. Purchasing a block of shares may have a noticeable impact on the stock’s price.

Depth of market is typically displayed as an electronic list of outstanding buy and sell orders, organized by price level and updated in real-time to reflect current activity. A matching engine pairs up compatible trades for completion.

Multiple Views of the DOM are available under the Settings Dropdown

Major Components of a DOM

  1. Settings: Control that allows you to style your DOM
  2. Best Bids: These are the top Limit Orders on the buy side
  3. Best Asks: These are the top Limit Orders on the sell side
  4. Buy Trades
  5. Sell Trades
  6. Price Level/Ladder: When several orders contain the same price, they are referred as a Price Level or Ladder, meaning that if, say, a bid comes at that price level, all the sell orders on that price level could potentially fulfill that
  7. Buy Trades: The quantity of all buy trades since the chart was launched at a given price level
  8. Sell Trades: The quantity of all sell trades since the chart was launched at a given price level
  9. Volume Profile: The Volume Profile for the current day
  10. Controls Bars: Navigation and Aggregation controls of the DOM

Actions on the Control Bar

  • Scroll Up
  • Scroll Down
  • Aggregate Up
  • Aggregate Down
  • Center Align
Control Bar – GoCharting DOM

Let us see these concepts in action