B2BX Exchange / Trading basics / Depth of Market or ‘Order book’: detailed description and analysis

Depth of Market or ‘Order book’: detailed description and analysis

In trading, one of the popular tactics is trading using volumes. Special technical indicators and tools have been developed for its application. Speculators are in great demand for the “stock market”, which allows them to analyze the financial market and assume its further direction. The main advantage of this tool is the ability to track the positions of major players, on which changes in market quotations depend. This tool is available on every platform or platform where trades are made.

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

The main purpose is to monitor the mood of the market. “Depth of Market” and its analysis allow an expert or trader to understand what is happening in the market.

Main functions:

  • statistical data (visibility of orders from all market participants);

  • determination of limit orders of major players;

  • reflection of spread size indicators;

  • analysis and forecasting of quotations.

With this tool, you can assess the market situation, the state of the financial market (flat or trend movements and impulses), who is more – buyers or sellers, identify the most favorable moments for opening a position, determine the levels of support and resistance, as well as see large orders with large contracts

The correct use of the”order book” depends on the future profit of the trader. A beginner who decides to use this tool should understand what an “order book” is, a detailed description of which can be found in any trading manual, and how it works. In addition, he will need to learn how to analyze the statistical data obtained on it and use them in the financial market. “Depth of Market” looks like a table, which displays the limit orders of all market participants, as well as the current rate of quotations. All of them are divided into two categories:

  • sales – orders, which are in the red field.

  • buy orders — in a green field.

“Order book” has a scale, which displays market quotes. The transition between the red and green fields is the area where the values of the indicators are currently located, that is, at market prices.

You need to learn how to use it correctly if you would like to use it. Any trading participant can open a position at the right time at market prices or place a pending order on certain quote indicators. Such orders will be immediately displayed in the” glass”, where in the future traders and analysts use them for analysis. The principle of operation of the order book is quite simple: traders put limit orders at current prices, which are immediately shown in it. Positions opened at market quotations are reflected in the middle of the “order book”, 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.

The principle of the “order book”:

  1. to Determine the most favorable rate for opening a position.

  2. At the selected quote level, place a limit order using a pending order.

  3. After reaching the desired level, the position will be opened. The order is closed automatically if traders use “Take Profit” or in manual mode after reaching the required number of points for the speculator.


Traders use this handy tool in trading to open trades and predict changes in market movements. The main thing is to understand how to use the “Depth of Market” correctly and get more profit with it. It is used both in Analytics and in various trading strategies, for example, in techniques for rebound or break quotes during the flat and trend. Using the “order book” is very simple: you need to use it to determine where the limit orders of large players are placed, choose the level of quotations with a high probability of profit and place a limit order. “The Depth of Market” is an excellent assistant of the trader. It allows you to maximize the use of statistical data and fully apply Analytics, as well as to determine the positions of major players and other market participants.