The Market Depth (Depth of Market or DOM) feature in MetaTrader 5 (MT5) offers a comprehensive view of buy and sell orders for a specific trading instrument across various price levels. Here’s an overview of its functionality and benefits:
Features and Benefits of Market Depth
Liquidity Visualization
The DOM displays the best bid and ask prices alongside the available volumes at each price level. This helps traders assess market liquidity and understand the potential impact of larger orders on price movements.
Order Execution
Traders can place both market and pending orders directly through the DOM interface. This includes limit and stop orders, providing precise control over entry and exit points.
Transparent Pricing
With real-time insights into pricing and spreads, the DOM delivers transparency regarding the supply and demand dynamics of the selected asset. This is particularly advantageous for scalpers and high-frequency traders.
Market Transactions
The DOM supports direct execution of market orders (buy/sell at the current market price) and trade requests for pending orders. This enables quick and efficient trading actions.
Volume Weighted Average Price (VWAP)
When executing large orders, the DOM calculates the entry or exit price using the VWAP, ensuring the order is filled at the best average price across multiple price levels.
How to Access the Market Depth Feature
To utilize the Market Depth feature in MT5:
Right-click on a trading instrument in the “Market Watch” window.
Select “Depth of Market” from the context menu.
This feature equips traders with enhanced market insights and execution capabilities, making it a valuable tool for informed and efficient trading decisions.