Depth of Market Archives • Futures Day Trading Strategies

Posts Tagged Under: Depth of Market

Deciphering Order Flow – Understanding The Mechanism That Moves Price

 

To understand the mechanism that moves the price up or down we have to learn the interplay between the Depth of Market on one side and Market Orders on the other hand. This interplay is the Order Flow. We used SierraChart Trading Platform for the illustration.

The Current Price is the last price in which a trade took place. This last trade could have taken place either at the Best Bid Price or at the Best Ask Price. Those two terms will make sense in a minute once we understand what the Depth of Market is.

The Depth of Market is the total Size of limit buy or sell orders that are placed at each price. It is often called Liquidity, Limit Orders, Passive Orders or The Book. Take a look at figure #1.

Order Flow Figure #1:  The Emini-S&P500 DOM ( Sierra Chart charting and trading platform.)

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Using the Trading DOM in Q Trader

 

With the Trading DOM in Q Trader, you can quickly place limit, market, and stop orders, as well as view market depth. Learn the basics in the following video. To get your demo: https://www.optimusfutures.com/forum/cqg-q-trader/ 

TRADING FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS. THE USE OF STOP LOSS OR CONTINGENT ORDERS MAY NOT PROTECT PROFITS OR LIMIT LOSSES TO THE AMOUNT INTENTED. CERTAIN MARKET CONDITIONS MAY MAKE IT DIFFICULT OR IMPOSSIBLE TO EXECUTE SUCH ORDERS. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.THERE ARE RISKS ASSOCIATED WITH UTILIZING AN INTERNET-BASED EXECUTION, BUT NOT LIMITED TO, THE FAILURE OF HARDWARE, SOFTWARE AND INTERNET CONNECTION. SINCE TRADERS PLATFORM DOES NOT CONTROL SIGNAL POWER, ITS RECEPTION OR ROUTING VIA INTERNET, CONFIGURATION OF YOUR EQUITPMENT OR RELIABILITY OF ITS CONNECTION, WE CANNOT BE RESPONSIBLE FOR COMMUNICATION FAILURES, DISTORTIONS OR DELAYS WHEN

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