"Market glass": detailed description and analysis

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In trading, one of the most popular tactics is trading using volumes. Special technical indicators and tools have been developed for its application. Speculators are in great demand with the “exchange glass”, which allows them to analyze the financial market and suggest its further direction. The main advantage of this tool is the ability to track the positions of large players, on which changes in market quotes depend.

What is a "order book"?

This tool is available on every site or platform where trading transactions are made. For example, on MetaTrader 5 it can be found in the main settings section of the site (market review) called “DOM”, and on the Quik platform it is located in the “trading - orders” tab.

The Market Order Book is a table that reflects limit and market orders from all financial market participants with any changes in real time. This is the most convenient way to identify large contracts and, depending onfrom a trading strategy to open buy/sell positions or, conversely, exit the market and close orders. It is convenient to use it in trading, as it is installed on the market quotes chart and the trader does not have to open any additional tabs.

Functions of the glass

Its main purpose in trading is to track market sentiment. The "order book" and its analysis allow an expert or a trader to understand what the situation is on the market.

Main functions:

• statistical data (visibility of orders from all market participants);
• determination of limit orders of large players;
• reflecting spread sizes;
• quote analysis and forecasting.

Using this tool, you can assess the market situation, what state the financial market is in (flat or trend movements and impulses), who is more on it - buyers or sellers, identify the most favorable moments for opening a position, determine support levels and resistance as well as see big bids with big contracts.

Tool description

The future profit of a trader depends on the correct use of the "glass". A beginner who decides to use this tool should understand what a "order book" is, a detailed description of which can be found in any trading guide, and how it works. In addition, he will need to learnanalyze the statistical data obtained from it and use them in the work on the financial market.

"DOM" looks like a table, which displays the limit orders of all market participants, as well as the current quotes. They all fall into two categories:

1. Sell orders that are in the red field of the order book.
2. Limit buy orders are in the green box.

"Market glass" has a scale that displays market quotes. The transition between the red and green fields is the zone where the values of the indicators are at the moment, that is, at market prices.

In the DOM you can see absolutely all limit orders with different volumes of contracts, as well as spread values that change periodically. Its study will not take much time and any beginner will be able to deal with it, since it is based on only a few indicators: a quote scale and two fields for buying and selling with spread display.

DOM analysis

For trading on the financial market, systems have been developed that use this tool. The "order book" and its analysis allow traders to predict changes in quotes and find promising points for entering the market using special techniques.

All bids are distributed by contract size:

1. Exposed limit orders from large players have a value of more than 5 thousand contracts. These are very important applications.and should be analyzed first. It is they who change the direction of the market, create impulses and trends and carry out large price movements on it. Professionals advise beginners not to trade at this time, as the slightest mistake can destroy the deposit of an inexperienced player, as a result of which he will receive a "Margin Call".
2. Applications up to 500 contracts are placed by average market participants. They also need to be looked at, as they, albeit to a lesser extent, but influence market changes.
3. Small orders are considered indicators up to 50 contracts. Such positions are completely unaffected by any changes in quotes and are considered insignificant or neutral orders.

An equally significant role is played by the relationship between "passive" and "aggressive" types of orders, which also needs to be taken into account and carefully studied during market analysis. The first option of positions determines the levels of support/resistance on the chart. "Aggressive" orders are placed by large market participants, with the help of which movements occur on it and trends are created.

Before opening each position, it is necessary to carefully study all changes in the “order book” indicators, assess the market situation and analyze it using analytical and statistical data.

Working principle

To really make money in the financial market using this tool, you need to learn how to use it correctly. First of all, you need to understand how the "stock market" works.glass" and correctly apply it in trading.

Any bidder can open a position at the right time for him at market prices or place a pending order at certain quotes. Such orders will immediately be displayed in the "DOM", where traders and analysts will use them for further analysis.

The Depth of Market principle is quite simple: traders place limit orders at current prices, which are immediately shown in it. Positions opened at market quotes are reflected in the middle of the glass, in the transition zone between buying and selling. The further the order is placed from the current prices, the more profit it will bring to the trader.

To quickly place an order, you need to use the "one-click trading" function. Initially, it must be configured, and in the future all parameters will be saved, the opening of applications occurs instantly. Such characteristics are especially important in scalping and short-term trades, where every second counts.

The principle of the "glass":

1. Determine the most favorable rate for opening a position.
2. Place a limit order using a pending order at the selected quote level.
3. After reaching the required level, the position will be opened.

The order is closed automatically if traders use "Take Profit" or manually when the number of points required for the speculator is reached.

Using "glass"in trading

Traders use this handy trading tool to open trades and predict changes in market movements. The main thing is to understand how to use the "exchange glass" correctly and get more profit with it. It is used both in analytics and in various trading strategies, for example, in methods for a rebound or breakout of quotes, during a flat and a trend.

Using the "DOM" is very simple: you need to use it to determine where the limit orders of large players are set, select the level of quotes with a high probability of profit and place a limit order.

"Market glass" is an excellent trader's assistant. It allows you to make the most of statistical data and fully apply analytics, as well as determine the positions of large players and other market participants.