Depth of Market Chart

A Depth of Market (DOM) chart is a real-time visualization of the limit order book, showing the volume of buy and sell orders at various price levels. It provides a graphical representation of market depth, allowing traders to see where liquidity is concentrated and where potential support or resistance levels lie.

The DOM chart typically displays the bid side in one color and the ask side in another, with the height of the bars representing the volume at each price. By observing the changes in the DOM chart, traders can detect shifts in market sentiment and identify large orders that may act as walls to price movement.

It is a powerful tool for short-term trading and scalping, as it reveals the immediate supply and demand dynamics. However, the DOM can be deceptive due to order spoofing, where participants place large orders with the intent of canceling them before execution.

Skilled traders learn to interpret the DOM in conjunction with other data sources to filter out noise.