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I’ve watched dozens of trading videos prior to this one and could never understand what’s making the price move. However, something in my brain just clicked while watching your video and now it ALL makes sense. I’ve been under the impression that ALL market and limit orders had to be filled before the price moved. Thank you for making this video and simplifying how a price changes in the market.
for that reason saying " more sellers than buyers" or viceversa, is wrong... this is why this confusion comes from... it's better to say "sellers are more INTERESTED than buyers"
GLORIOUS, man, GLORIOUS!!! Pity it's unlikely for you to read this comment, but let me tell you: I didn't understand how the price moves until now. GLORIOUS!!! Thank you!!! Greetings from Mendoza, Argentina!!!
Finally, I understand. Been learning bookmap and couldn't quite figure it out. This is simply explained, tyvm! Now to figure out how price moves during after-hours, premarket.
I understand that his video is for a BASIC understanding of how the DOP is --- SUPPOSED TO WORK--- ( key WORDS -- SUPPOSED TO WORK!) But the ONLY TRUTH-- ONLY! -- is that market makers ARE WORKING BOTH SIDES of the TRADE--- the BID and ASK!! 1) E.G.--- the MARKET MAKER -- is on the ASK SIDE-- it IS ALWAYS IMPOSSIBLE to to tell if this is an individual trader or MM -- who is working FOR --- HIMSELF! NOW the NEXT thing that ALWAYS happens -- ALWAYS--- the MM SEES the 5 bid contracts you have on the video and NEVER takes these bids ----- IF HE (the MM) WANTS t the price to go higher! NEXT -- THE MM--- comes ONTO the ---- BID SIDE( yes NOW he is on BOTH SIDE (BID AND ASK!!!) the MM--- LIFTS his ASK --AND AT THE SAME TIME --- LIFTS HIS BID-- these get executed and the REAL TRADERS ( yes HUNDREDS of the them -- if not thousands !!!) are LEFT to ---- CHASE-- they have NO CHOICE -- as the MM -- WILL come to the BID side and KEEP supplying bids to LIFT the PRICE and KEEP TAKING the ASKS--- NOW the REAL traders MUST CHASE --- MORE if they want the stock! This happens ALL DAY ----EVERY DAY!! This problem can ONLY be SOLVED by using a market order( not really solve because you end up paying at the top of the ASK! But WHY-- WHY would I say a "market order" -- why pay up???? Because what is NEVER, EVER TOLD in NY VIDEOS about -- DOP is the this follwing IMPORTANT CONCEPT; EVERY SINGLE TIME--- you put in a LIMIT ORDER --- OF ANY KIND --- you ARE TELEGRAPHING to the MM--- the following; 1) if there are BIDS outweighing the ASK--- the MM is SEEING ( EVERY SINGLE TIME !!!) -- BIG INTEREST --- SO the MM JUMPS IN at the 1st position --- at a HIGHER BID and CONTINUES THIS!!!!! So, there is NO REAL way around this EXCEPT to buy one the DOWN SQUEEZE--- BUT --- your probabilities of the stock price GOING FURTHER DOWN--- are STILL there!! I CAN'T emphasize ENOUGH --- that the MM--- SEES EVERY single LIMIT ORDER and NOW -- he CONTROLS the PRICE, HE JUMPS in to do this --- ON BOTH SIDES!!! NOTE--- DO NOT let people who say they have DIRECT ACCESS or or types of WAYS to --- HIDE orders tell you this --- it IS A TOTAL LIE! Direct access and OTHER types of trading platforms ---- JUST TELL you what you WANT to HEAR!! the ONLY REAL hidden types of orders---- are those of BIG -- MM's and BIG MONEY--- close to the exchange SERVERS(high speed) ------ NO NOT the high the HIGH speed YOU are TOLD or some some convinces you it is "high speed" --- this is SOLE ownership of the LIKES of CITADEL and more!!
Really great video! Although pricing mechanism is such a foundational topic but many people can’t provide insights of it in detail. Your video went through every single aspects of how price moves in different situations and it was like I stumped into a goldmine. Simple yet detailed. Thank you!
bought this guys course, I figured if his free content was this good his paid stuff would be impressive, im halfway through it, already applying some of the techniques. I scalp options so its a little different from what he teaches, but the way he uses volume profile is so far better than any indicator weve been lead to believe is good, go buy the course.
Can't get any better than this....THANK YOU! Really explained the risk of using market orders, and how the "Last Price" is just that...the last traded price.
Forex is a very serious business thank you so much! i always thought "i only just need a strategy" not knowing that there's more to it than strategy, the fundamental aspects behind the scenes of the movement has just became the most progressive realization. Thank you so much for the clarity
I was wandering about this for some time now and I didn't know how to search for "what actually moves the market" and by chance i stumbled upon this, thank you sir
I spent 4 hours on youtube to understand this fundamental. Your video was the one I got all my answers. I wish I saw this earlier and could save 4 hours. Thank you. Liked and subscribed.
OMG!! I've been looking for an explanation and video like this for years and finally!! your channel found me, it must have been the universe rewarding me for my perseverance. Thank you for posting this vital video. It is a must watch for everyone that is trading any market.
Wow! This is such valuable knowledge. Finally understood why price moves, at times quite rapidly and at other times just sits there. Understood slippage as well as price gaps, at last. Great job, David. Thank you kindly.
Great video with in-depth explanation. I just have one question, let's say someone puts a stop order, what stops the exchange from executing that order. Let's say at 3:58 someone puts a sell stop order @97 for 2 units, why doesn't the exchange executes that order since thats a much better price for buyers to buy at and there is a seller willing to sell at that price too or a buy stop order @100 for 3 units, you still get your matching bid and ask in this case too.
I have watched so many videos...but this one was the perfect one for understanding how the candles stik move up or move down .. Thank you for this great explanation.❤❤
Not really. Because market markers will always be on play meaning they will take all market orders. And move the price to there advantage the limit orders will act as hedge on there positions in balancing the book. Most of time the volume is what move the market now the real question should be between limit orders and market orders which one has the highest volume?
Question? It may sound dumb but... what if there are 2 passive traders with identical bid/ask price, will those orders be paired... or are passive bid/ask orders ONLY paired with aggressive bid/ask orders?
So as more sell orders get cleared due to instant market buy orders, would that indicate that there is going to be a rally to the upside as the buy side is becoming more aggressive?
I have not get your question but Iam assuming you said the instant market buy volume is huge compare to the sell pending order and you want to know which direction will the market go ????? Then the answer is more likely the market markers will take all of the instant buy execution and possibly creat a small slippage to give them price advantage then they will move the price down to execute the sell pending order but that will depend how far those selling are compare to the expected market volatility of the day because if the market markers they don't obey that and the price fast to the sell orders to take the risk off there hands that can creat a spoofing opportunity. So if it happens the orders sell orders are far enough or were not enough to cover the all the instant buy order the market markers will simply blend the entire current volume with the general volume and move the price into there advantage average level which could be up and down at the same time just in a range that doesn't put them at market risk .
Obviously the more aggressive buyers instant orders get filled to clear sell orders and buyers are willing to buy at whatever market price is at any moment , the price will rally up until sellers get more aggressive than buyers, Now I can surely explain it because of this legend😢😢
@@NI_TURAGARA not really that's just common knowledge. If buyers become more aggressive it doesn't guarantee that the price will rally. That's only happens if you are dealing with less liquidity markets because of huge potential of volatility which creates huge slippage and helps market markers to push the price to the upside.
I was always confused that if for every buyer there is a seller and vice versa then what decides the direction of the price. This made it very clear. Great video! 💯💯💯
The irony: Someone whose first language isn't english, explains the auction theory perfectly to english speakers. Thanks for this very very clear explanation. i understand the auction theory perfectly now!!
This is one of the better explanations of the fundamentals of Depth of Market. Not some guru wannabe trying to impress... Anytime there's stick figures you know it's gonna be good!
I've been looking for a simple, accurate description of how the price moves for weeks. Thank you!! So if you want to move the price up and break the sell walls you need lots of market orders.
Sweet. Thanks for the confirmation. I was rattling me brain over this, but you just helped me clear it up. I always looked at the DOM in completely the opposite way - watching the sell barriers and expecting the price to move down when they were gobbled up.
Let's say I'm that big buyer and I want the price to jump from 99 to 103 immediately and I don't put market order but limit order. How to do that? I should buy all those three "asks" at the top? Or in a different way? Or is it enough if a buy even one of those 3 "asks" at the top?
So when I was trading BTC/USDT yesterday, and the were like 3 million SELL orders at 43,500; this would have moved the price UP, were there enough market orders triggerimg enough of these limit orders, to wipe them out? It seems counter intuitive to me. I would have expected it to fall - viewing in the light of supply and demand. If 3 million people just sold, then the supply just went up.... 🤔 but I suppose it's the inverse of that isn't it, because in order for them to sell, someone else had to be buying it - therefore lessening the supply. Think I might have to watch this a few more times. Nice video explanation, though, thanks!
Thank you. What does a matching engine do if a buy market order and sell market order both arrive but there are no guiding limit orders in the book? Does the exchange happen between the market orders at the most recent exchange price?
which one is more important to predict a mover. watching the bid activity or watching the asking activity because i thought watching the bid mean i can add to the bid with the most volume causing more movement that may over take the market BUT i notice that based on you after that volume for that bid price is all bought out the price might drop instead of moving up
I wonder why we don't see manipulations to a zero price by putting a lot of market sell orders in the basket. As far as I understand, one just needs to put more volume in the sell orders than is in the buy book, right? How to know how much volume is in the order books?
Amazing !!!! I've never seen a video explaining market depth in such a simple manner I never really understood market depth up until now since i am a newbie and i am trying to learn, thank you for posting such a great video.
Hey I refered to this video again... Can I get my orders executed even if the price is a little away from a large number of orders? Arbitrage kind of thing. Cause I've seen orders getting placed on the nearest order price by my broker. If I find a good difference, is it possible? Or it'll hft kind of differences
It means.. buying or selling at market price is risky.. the buy or sale price limit has to be determined whenever placing order.. or it might go for available price.
good explanation. Please advise; 1. is the data provided by the broker for DOM relates only to limit orders with the broker or is it market data? 2. Is the data provided on MT4 for the entire market or just the broker? 3. Is the data provided by TradingView for the market?
One of the best videos explaining this. One question I still have is if I use market order to buy and there’s a 1 unit limit at higher and lower price. Which price would it go to then? Up or down?
Thank you. Looking at Level 2 I knew what the bid and ask 'was' but didn't know how they got created. I thought it was limit orders. Your video confirms. Very much appreciated.
When a buyer is willing to buy at the market price will he/she be filled with the first available offer or the offer at the minimum price i.e if the trader 1 had asked for 100 instead of 99 then will the buyer be filled for 100 or 99? thanks in advance
Market orders represent immediacy. Therefore, you will be filled at the first available price with an order. BUT if you use a buy limit order, at say 100, that means you only want to be filled at 100 or lower for a buy order.(in the case of slippage)
sir for amost half year I was searching for a video to understand bid ask and excution of contracts .you explain soooooo easily .i thanku by heart .i would like req make all ur videos for indians too . you may dub in such english pronounciation which could easily be understood by indians.
Question: so if price is going up, and aggressive buy order is matched with sell limit orders, what will aggressive sell orders be matched with? As buy limit orders will be all the way down.
what happens when i place a buy stop order for 3 contracts at 103 @ 10:09 in the video? would the price then move up to 103 straight away as a turnover happens?
Great video thanks! Could you please describe from programming point of view what exactly happens. I mean, if people are trading they should all be sure that the soft (the algorithm) will not malfunction. Who ensures that? Who writes the algorithm? Who owns it and why?
So if we're looking for the price to move DOWN, because we're shorting an asset, should we be looking at the green side of the DOM for large order amounts as an exit? For Example: if we're short at 100 and we want a 5% movement down to 95 as an exit, should we be looking for lots of buy orders / "buy walls" through 99, 98, 97 & 96? I was doing the exact opposite up until now. Looking at the sell orders as blocks; thinking, when the price reaches 105, for example, where there are 10 sellers - this block will force the price down...
It depends. If demand is pushing price down then, yes, it may be an indication of where traders expect to exit, but typically limit orders act as a wall to "prevent" further price movement in that direction. Remember that the orders you see on the DOM are limit orders (for either side). They're NOT the demand, each set of orders are supply/passiveness. Market orders (which you can't see listed on the DOM for either side) are the demand/aggressiveness. There is a DUAL tug-of-war going on between supply & demand for "(invisible) market buys & (visible) limit sells", and "(invisible) market sells & (visible) limit buys", simultaneously. BOTH SIDES of the trade have supply and demand. ...again: - limit orders = supply - market orders = demand So, theoretically, if you want to exit at 95 after shorting at 100, you're looking for two things: 1) Demand pushing market price down steadily (i.e. this means more SELL MARKET orders are being placed than BUY MARKET orders), gobbling up visible BUY LIMIT orders faster than visible SELL LIMIT orders are being gobbled up. 2) Fewer visible BUY LIMIT orders at prices 99 - 95, creating weaker "walls" to penetrate (with your "limit buy" placed early enough in the queue at 95 so that it fills and you exit quicker). ---for bonus--- 3) Since we can't see MARKET orders on the DOM, a Volume Oscillator indicator can show you the rate at which MARKET orders are entering or exiting the market. Any % above zero (0) means demand is growing at that rate, and any % below zero (0) means demand is shrinking at that rate...the indicator just doesn't show whether that demand is buy-side or sell-side.
Hold up..I got a bit confused with the colors. So the left side's for pending sell orders (buy limit) and the right side's for pending buys (sell limit) ?
Bro, This guy just used One Image to Breakdown the WHOLE Forex Market without even pulling up a single chart!! And the video is only 11 minutes long, not hours. I have watched this video 3 times and pausing to take notes, no one has ever broken down forex to me like this in my 4 years of trading. This is crazy. I should've watched this a looong time ago.
It is indeed a very good video on how and why price moves - I knew bits already but had very poor explanations from someone who can 'read the tape'. Just goes to show not anyone can be an educator and get their point across with the necessary clarity.
There is one question i have for this video He explains that this is a first come first serve basis (e.g. if there is a market order, it will get the first limit order that was placed) My question is this. What if the first sell limit order is very high (in the video above, the example DOM shows a table of price ranging from 97 to 103). If I were trader 1, and I placed my first sell limit order to something high like lets say 500. Then trader 2 puts it normally at 99, and so on. What happens when the first buy market order is placed? Does it pair it with my sell limit order of 500 since i placed the first sell limit order? What happens during this situation
Please reply because I am kinda confused i thought change in underlying changed the price especially in options(For Index) but after seeing this video i am not sure which one it is that moves the price ?
You're doing a fantastic job! I need some advice: I have a SafePal wallet with USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). What's the best way to send them to Binance?
O ly thing missing is hidden orders or iceberg orders, these are limit orders that aren't shown in the order book, also be aware people will pull orders before they get filled to give the appearance of a buy/sell wall in the depth chart
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Can u make a vedioto connect depth of the market and open interest
No bull crap and promoting his only fans. Just knowledge. I salute you sir
The greatest video of market description I've ever see!
I second this
#MeToo
For sure
Well explained best video
Aswear
I’ve watched dozens of trading videos prior to this one and could never understand what’s making the price move. However, something in my brain just clicked while watching your video and now it ALL makes sense. I’ve been under the impression that ALL market and limit orders had to be filled before the price moved. Thank you for making this video and simplifying how a price changes in the market.
DITTO.... I was thinking the EXACT same way! This video is a God sent!
for that reason saying " more sellers than buyers" or viceversa, is wrong... this is why this confusion comes from... it's better to say "sellers are more INTERESTED than buyers"
So wait sellers are interested in what actually?
@@Mr.Ricky0 seller more then buy at key level usually mean price going down
I have spent many months on searching a content like this ..finally youtube algo recommended it to me..
Man, no one has ever explain this better!! Great work!!!
GLORIOUS, man, GLORIOUS!!! Pity it's unlikely for you to read this comment, but let me tell you: I didn't understand how the price moves until now. GLORIOUS!!! Thank you!!! Greetings from Mendoza, Argentina!!!
This video is absolutely the perfect video on Depth of Market
I was searching for this explanation my whole life! At last I got it! Thanks man!
Glad my videos helped, good luck in your trading
Finally, I understand. Been learning bookmap and couldn't quite figure it out. This is simply explained, tyvm! Now to figure out how price moves during after-hours, premarket.
I understand that his video is for a BASIC understanding of how the DOP is --- SUPPOSED TO WORK--- ( key WORDS -- SUPPOSED TO WORK!)
But the ONLY TRUTH-- ONLY! -- is that market makers ARE WORKING BOTH SIDES of the TRADE--- the BID and ASK!!
1) E.G.--- the MARKET MAKER -- is on the ASK SIDE-- it IS ALWAYS IMPOSSIBLE to to tell if this is an individual trader or MM -- who is working FOR --- HIMSELF!
NOW the NEXT thing that ALWAYS happens -- ALWAYS--- the MM SEES the 5 bid contracts you have on the video and NEVER takes these bids ----- IF HE (the MM) WANTS t
the price to go higher!
NEXT -- THE MM--- comes ONTO the ---- BID SIDE( yes NOW he is on BOTH SIDE (BID AND ASK!!!) the MM--- LIFTS his ASK --AND AT THE SAME TIME --- LIFTS HIS BID-- these get executed and
the REAL TRADERS ( yes HUNDREDS of the them -- if not thousands !!!) are LEFT to ---- CHASE-- they have NO CHOICE -- as the MM -- WILL come to the BID side and KEEP supplying bids to LIFT the PRICE and KEEP TAKING the ASKS--- NOW the REAL traders MUST CHASE --- MORE if they want the stock!
This happens ALL DAY ----EVERY DAY!!
This problem can ONLY be SOLVED by using a market order( not really solve because you end up paying at the top of the ASK!
But WHY-- WHY would I say a "market order" -- why pay up????
Because what is NEVER, EVER TOLD in NY VIDEOS about -- DOP is the this follwing IMPORTANT CONCEPT;
EVERY SINGLE TIME--- you put in a LIMIT ORDER --- OF ANY KIND --- you ARE TELEGRAPHING to the MM--- the following; 1) if there are BIDS outweighing the ASK--- the MM is SEEING ( EVERY SINGLE TIME !!!) -- BIG INTEREST --- SO the MM JUMPS IN at the 1st position --- at a HIGHER BID and CONTINUES THIS!!!!!
So, there is NO REAL way around this EXCEPT to buy one the DOWN SQUEEZE--- BUT --- your probabilities of the stock price GOING FURTHER DOWN--- are STILL there!!
I CAN'T emphasize ENOUGH --- that the MM--- SEES EVERY single LIMIT ORDER and NOW -- he CONTROLS the PRICE, HE JUMPS in to do this --- ON BOTH SIDES!!!
NOTE--- DO NOT let people who say they have DIRECT ACCESS or or types of WAYS to --- HIDE orders tell you this --- it IS A TOTAL LIE!
Direct access and OTHER types of trading platforms ---- JUST TELL you what you WANT to HEAR!! the ONLY REAL hidden types of orders---- are those of BIG -- MM's and BIG MONEY--- close to the
exchange SERVERS(high speed) ------ NO NOT the high the HIGH speed YOU are TOLD or some some convinces you it is "high speed" --- this is SOLE ownership of the LIKES of CITADEL and more!!
Thank you for stating this 🔥
Best explanation of DOM I have seen here, simple and direct to the point. Thanks for sharing!
Really great video! Although pricing mechanism is such a foundational topic but many people can’t provide insights of it in detail. Your video went through every single aspects of how price moves in different situations and it was like I stumped into a goldmine. Simple yet detailed. Thank you!
Thanks very much your appreciation!
bought this guys course, I figured if his free content was this good his paid stuff would be impressive, im halfway through it, already applying some of the techniques. I scalp options so its a little different from what he teaches, but the way he uses volume profile is so far better than any indicator weve been lead to believe is good,
go buy the course.
Hey Jeramy - very delighted to hear that! I will be in touch soon with you to see how you're progressing!
This was an awesome explanation. Nowhere else had I seen such an explanation.
Can't get any better than this....THANK YOU! Really explained the risk of using market orders, and how the "Last Price" is just that...the last traded price.
Forex is a very serious business thank you so much! i always thought "i only just need a strategy" not knowing that there's more to it than strategy, the fundamental aspects behind the scenes of the movement has just became the most progressive realization. Thank you so much for the clarity
I was wandering about this for some time now and I didn't know how to search for "what actually moves the market" and by chance i stumbled upon this, thank you sir
Beautiful explanation not gonna lie. Now understand the market better than looking at plain charts and higher highs
Everyone must start their trading.career with this video . Brilliant!!! Thank you so much.
This is phenomenal I've looked all over and this detail is what I was looking for
I spent 4 hours on youtube to understand this fundamental. Your video was the one I got all my answers. I wish I saw this earlier and could save 4 hours. Thank you. Liked and subscribed.
Thank you, always glad to hear that my videos helped people!
OMG!! I've been looking for an explanation and video like this for years and finally!! your channel found me, it must have been the universe rewarding me for my perseverance. Thank you for posting this vital video. It is a must watch for everyone that is trading any market.
Wow! This is such valuable knowledge. Finally understood why price moves, at times quite rapidly and at other times just sits there. Understood slippage as well as price gaps, at last. Great job, David. Thank you kindly.
Great to hear that, glad I helped
I’ve been trading for three years and never seen this explained so clearly. Thank you.
Great video with in-depth explanation.
I just have one question, let's say someone puts a stop order, what stops the exchange from executing that order.
Let's say at 3:58 someone puts a sell stop order @97 for 2 units, why doesn't the exchange executes that order since thats a much better price for buyers to buy at and there is a seller willing to sell at that price too or a buy stop order @100 for 3 units, you still get your matching bid and ask in this case too.
Bro explain it like a pro definitely recommend it for beginners who wants to learn how the market works👍👍
I have watched so many videos...but this one was the perfect one for understanding how the candles stik move up or move down ..
Thank you for this great explanation.❤❤
The best video on instantaneous price change in exchange due to market depth I have ever seen...
Nicely Explained... Keep up the good work
Thanks for the feedback Arun!
By far the clearest explanation I've seen on UA-cam! Great video
The Most Under rated video on YT.
Best Video on how price action is working i've ever seen!!!🔥💪🏼
Does this mean that only market orders move the price up and down? (Since limit buys and limit sells just sits and waits to be filled?)
Not really. Because market markers will always be on play meaning they will take all market orders. And move the price to there advantage the limit orders will act as hedge on there positions in balancing the book. Most of time the volume is what move the market now the real question should be between limit orders and market orders which one has the highest volume?
Question? It may sound dumb but... what if there are 2 passive traders with identical bid/ask price, will those orders be paired... or are passive bid/ask orders ONLY paired with aggressive bid/ask orders?
One of the most amazing, coherently explained, and crucial information of how market price move videos I’ve seen!
So as more sell orders get cleared due to instant market buy orders, would that indicate that there is going to be a rally to the upside as the buy side is becoming more aggressive?
I have not get your question but Iam assuming you said the instant market buy volume is huge compare to the sell pending order and you want to know which direction will the market go ????? Then the answer is more likely the market markers will take all of the instant buy execution and possibly creat a small slippage to give them price advantage then they will move the price down to execute the sell pending order but that will depend how far those selling are compare to the expected market volatility of the day because if the market markers they don't obey that and the price fast to the sell orders to take the risk off there hands that can creat a spoofing opportunity. So if it happens the orders sell orders are far enough or were not enough to cover the all the instant buy order the market markers will simply blend the entire current volume with the general volume and move the price into there advantage average level which could be up and down at the same time just in a range that doesn't put them at market risk .
Obviously the more aggressive buyers instant orders get filled to clear sell orders and buyers are willing to buy at whatever market price is at any moment , the price will rally up until sellers get more aggressive than buyers,
Now I can surely explain it because of this legend😢😢
@@NI_TURAGARA not really that's just common knowledge. If buyers become more aggressive it doesn't guarantee that the price will rally. That's only happens if you are dealing with less liquidity markets because of huge potential of volatility which creates huge slippage and helps market markers to push the price to the upside.
finally someone explain this in real words to clarify this point, thanks
I was always confused that if for every buyer there is a seller and vice versa then what decides the direction of the price. This made it very clear. Great video! 💯💯💯
The irony: Someone whose first language isn't english, explains the auction theory perfectly to english speakers. Thanks for this very very clear explanation. i understand the auction theory perfectly now!!
This is one of the better explanations of the fundamentals of Depth of Market. Not some guru wannabe trying to impress...
Anytime there's stick figures you know it's gonna be good!
As a very "green" trader, I found your video VERY easy to understand. Thank you for this great explanation, on how DoM actually works !
I've been looking for a simple, accurate description of how the price moves for weeks. Thank you!!
So if you want to move the price up and break the sell walls you need lots of market orders.
Sweet. Thanks for the confirmation. I was rattling me brain over this, but you just helped me clear it up.
I always looked at the DOM in completely the opposite way - watching the sell barriers and expecting the price to move down when they were gobbled up.
Totally brilliant explanation .. ive watched it 3 times now and its slowly sinking in. Thank you
Let's say I'm that big buyer and I want the price to jump from 99 to 103 immediately and I don't put market order but limit order. How to do that? I should buy all those three "asks" at the top? Or in a different way? Or is it enough if a buy even one of those 3 "asks" at the top?
Do you have any recommended web/software/service for watch Depth of Market? Thank you.
...this one is a pure perfection of explaining price action...bravo again...
One doubt. The first available offer is based on the time that sell limit order placed or its asking price ie minimum in selling depth?
So when I was trading BTC/USDT yesterday, and the were like 3 million SELL orders at 43,500; this would have moved the price UP, were there enough market orders triggerimg enough of these limit orders, to wipe them out?
It seems counter intuitive to me. I would have expected it to fall - viewing in the light of supply and demand. If 3 million people just sold, then the supply just went up.... 🤔 but I suppose it's the inverse of that isn't it, because in order for them to sell, someone else had to be buying it - therefore lessening the supply.
Think I might have to watch this a few more times. Nice video explanation, though, thanks!
Thank you. What does a matching engine do if a buy market order and sell market order both arrive but there are no guiding limit orders in the book? Does the exchange happen between the market orders at the most recent exchange price?
The clarification brought by this video is beyond impressive!
so when the market gaps up or down and buyers/sellers get slippage - this creates inefficiency in the market? within the area that has gapped?
which one is more important to predict a mover.
watching the bid activity or watching the asking activity
because i thought watching the bid mean i can add to the bid with the most volume causing more movement that may over take the market BUT i notice that based on you after that volume for that bid price is all bought out the price might drop instead of moving up
Hello, would it be possible to create a video on volume profile?
This is the best, the clearest explanation I've seen. I now have an actual, proper understanding of the order book! Thank you for this
Now that you know how the order book works the main question is how will you make money from it? The order book moves so fast
What about price suppression or support? Putting big sell q on top to prevent it from going up, or big buys at a lower level to create a support
Best explanation on Depth of Market - true educational video on DOM.THANKS SIR.
To the point and crystal clear, excellent explanation.
Thanks!
I wonder why we don't see manipulations to a zero price by putting a lot of market sell orders in the basket. As far as I understand, one just needs to put more volume in the sell orders than is in the buy book, right? How to know how much volume is in the order books?
Amazing !!!! I've never seen a video explaining market depth in such a simple manner I never really understood market depth up until now since i am a newbie and i am trying to learn, thank you for posting such a great video.
didnt understand the matching of passive and agressive traders. great explanation. brilliant.
This video is what I needed... the missing piece to the puzzle of trading at a high level
Hey I refered to this video again... Can I get my orders executed even if the price is a little away from a large number of orders? Arbitrage kind of thing.
Cause I've seen orders getting placed on the nearest order price by my broker. If I find a good difference, is it possible? Or it'll hft kind of differences
It means.. buying or selling at market price is risky.. the buy or sale price limit has to be determined whenever placing order.. or it might go for available price.
good explanation. Please advise; 1. is the data provided by the broker for DOM relates only to limit orders with the broker or is it market data? 2. Is the data provided on MT4 for the entire market or just the broker? 3. Is the data provided by TradingView for the market?
If you got the answers then plz let me also know
What are the tools to view market order as well ?
Circling this subject from like a ten foot pole far just this morning I wondered what exactly slippage was. And here it is.
The best explanation on Market depth in all of Internet
One of the best videos explaining this. One question I still have is if I use market order to buy and there’s a 1 unit limit at higher and lower price. Which price would it go to then? Up or down?
Hi Dee, in that case it would simply go to higher price as that's where it would find the limit to be paired with
Thank you. Looking at Level 2 I knew what the bid and ask 'was' but didn't know how they got created. I thought it was limit orders. Your video confirms. Very much appreciated.
Simply amazing! This video was the missing puzzle for me! Thank you so much!!!
Thanks for the feedback, glad that my video helped you!
When a buyer is willing to buy at the market price will he/she be filled with the first available offer or the offer at the minimum price i.e if the trader 1 had asked for 100 instead of 99 then will the buyer be filled for 100 or 99? thanks in advance
Market orders represent immediacy. Therefore, you will be filled at the first available price with an order. BUT if you use a buy limit order, at say 100, that means you only want to be filled at 100 or lower for a buy order.(in the case of slippage)
sir for amost half year I was searching for a video to understand bid ask and excution of contracts .you explain soooooo easily .i thanku by heart .i would like req make all ur videos for indians too . you may dub in such english pronounciation which could easily be understood by indians.
Can two different limit orders at the same price cancel each other out?
Question: so if price is going up, and aggressive buy order is matched with sell limit orders, what will aggressive sell orders be matched with? As buy limit orders will be all the way down.
Nice work. But how does a all time new high stock goes higher? Because there is no sellers up there. And no selling order available at higher price.
I really appreciate your video helped me to feel the mechanism of the DOM in a better way. Well done!
What if you want to buy the market at 99 and up but there are no sell limit orders above 99 can you still buy above 99 to take the market higher?
Been looking for this video for ages glad I finally found it again
what happens when i place a buy stop order for 3 contracts at 103 @ 10:09 in the video? would the price then move up to 103 straight away as a turnover happens?
No
10:55 "the price moves in relation to market orders and available limit orders"
Great video thanks! Could you please describe from programming point of view what exactly happens. I mean, if people are trading they should all be sure that the soft (the algorithm) will not malfunction. Who ensures that? Who writes the algorithm? Who owns it and why?
1 question.... Which tool provide to watch market orders in market depth
After too many searches i got my point from this video thanks........
Awesome video man.....This is must watch video before anyone starting stock market journey. Thank you once again for great explanation.😊
So if we're looking for the price to move DOWN, because we're shorting an asset, should we be looking at the green side of the DOM for large order amounts as an exit?
For Example: if we're short at 100 and we want a 5% movement down to 95 as an exit, should we be looking for lots of buy orders / "buy walls" through 99, 98, 97 & 96?
I was doing the exact opposite up until now. Looking at the sell orders as blocks; thinking, when the price reaches 105, for example, where there are 10 sellers - this block will force the price down...
It depends. If demand is pushing price down then, yes, it may be an indication of where traders expect to exit, but typically limit orders act as a wall to "prevent" further price movement in that direction.
Remember that the orders you see on the DOM are limit orders (for either side). They're NOT the demand, each set of orders are supply/passiveness. Market orders (which you can't see listed on the DOM for either side) are the demand/aggressiveness.
There is a DUAL tug-of-war going on between supply & demand for "(invisible) market buys & (visible) limit sells", and "(invisible) market sells & (visible) limit buys", simultaneously. BOTH SIDES of the trade have supply and demand.
...again:
- limit orders = supply
- market orders = demand
So, theoretically, if you want to exit at 95 after shorting at 100, you're looking for two things:
1) Demand pushing market price down steadily (i.e. this means more SELL MARKET orders are being placed than BUY MARKET orders), gobbling up visible BUY LIMIT orders faster than visible SELL LIMIT orders are being gobbled up.
2) Fewer visible BUY LIMIT orders at prices 99 - 95, creating weaker "walls" to penetrate (with your "limit buy" placed early enough in the queue at 95 so that it fills and you exit quicker).
---for bonus---
3) Since we can't see MARKET orders on the DOM, a Volume Oscillator indicator can show you the rate at which MARKET orders are entering or exiting the market.
Any % above zero (0) means demand is growing at that rate, and any % below zero (0) means demand is shrinking at that rate...the indicator just doesn't show whether that demand is buy-side or sell-side.
Hold up..I got a bit confused with the colors. So the left side's for pending sell orders (buy limit) and the right side's for pending buys (sell limit) ?
I was looking for this video for years. More videos like this please
Can institutions or market makers grab liquidity or does this mechanism of orderbook prevents them to do that? Please i need a answer
I also want answer plz
Bro, This guy just used One Image to Breakdown the WHOLE Forex Market without even pulling up a single chart!! And the video is only 11 minutes long, not hours. I have watched this video 3 times and pausing to take notes, no one has ever broken down forex to me like this in my 4 years of trading. This is crazy. I should've watched this a looong time ago.
It is indeed a very good video on how and why price moves - I knew bits already but had very poor explanations from someone who can 'read the tape'. Just goes to show not anyone can be an educator and get their point across with the necessary clarity.
There is one question i have for this video
He explains that this is a first come first serve basis (e.g. if there is a market order, it will get the first limit order that was placed)
My question is this. What if the first sell limit order is very high (in the video above, the example DOM shows a table of price ranging from 97 to 103). If I were trader 1, and I placed my first sell limit order to something high like lets say 500. Then trader 2 puts it normally at 99, and so on. What happens when the first buy market order is placed? Does it pair it with my sell limit order of 500 since i placed the first sell limit order? What happens during this situation
Absolutely great video! Explains it very well. Best video I have seen on UA-cam for any novice or little experienced trader. Thanks 🙏
Question : there are no market order in pre market so how does the price change drastically in pre market?
I also want the answer of this question. Plz let me also know
Please reply because I am kinda confused i thought change in underlying changed the price especially in options(For Index) but after seeing this video i am not sure which one it is that moves the price ?
You're doing a fantastic job! I need some advice: I have a SafePal wallet with USDT, and I have the seed phrase. (alarm fetch churn bridge exercise tape speak race clerk couch crater letter). What's the best way to send them to Binance?
Outstanding job ! Really helpfull thanks !!!!
Thanks for the explaination, its very old video but its GOLD 😊, accurately tells how market price moves, Thanks 👍🏻
On my level 2 I can see bid size and ask size (passive investors). How about market order? Where can I find them? Please suggest.
A time and sales window next to my level 2 is where I see it happen.
O ly thing missing is hidden orders or iceberg orders, these are limit orders that aren't shown in the order book, also be aware people will pull orders before they get filled to give the appearance of a buy/sell wall in the depth chart