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Depth of Market

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 28 Apr 2023

Table of Contents

Depth of Market

Depth of Market (DOM) is a term used in financial markets to describe the amount of liquidity available at different price levels for a given asset. It is a measure of the number of orders available at different prices, and is used to gauge the liquidity of a given asset. The DOM is a useful tool for traders, as it provides an indication of the amount of liquidity available at different price levels, and can be used to determine the best price to enter or exit a trade.

History of Depth of Market

The concept of Depth of Market has been around since the early days of financial markets. It was first used in the stock market, where traders would use the DOM to determine the best price to enter or exit a trade. As technology advanced, the concept of Depth of Market was adopted by other financial markets, such as the futures and foreign exchange markets. Today, the DOM is used by traders in all financial markets to gauge the liquidity of a given asset.

Comparison Table

Asset Depth of Market
Stock High
Futures Medium
Forex Low

Summary

Depth of Market is a term used in financial markets to describe the amount of liquidity available at different price levels for a given asset. It is a useful tool for traders, as it provides an indication of the amount of liquidity available at different price levels, and can be used to determine the best price to enter or exit a trade. More information about Depth of Market can be found on websites such as Investopedia and Bloomberg.

See Also

  • Liquidity
  • Order Book
  • Bid-Ask Spread
  • Market Maker
  • Price Action
  • Volume
  • Technical Analysis
  • Fundamental Analysis
  • Order Flow
  • Algorithmic Trading

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