Does anyone use the DOM, and depth of market in their trading? example, you are in a trade and you are in an average range of 5 ticks or so ''evening markets" and you have 10 seconds left on the clock, you are long and volume is still pushing candle up with no signs of a wick on the candle, but when the clock hits 0 and a new bar opens up, price opens down. Will DOM detect this drop? I have been watching the DOM on trading view and it is really difficult,..it doesn't seem to give any warning, because it happens so fast, and I can tell you there are no indicators that will detect it. Anyone out there able to do this? Will the DOM save a couple of ticks on a trade? DOM or level 2 which, please explain..
Candles always lag DOM because candles are based on trades while Dom is showing bids and asks. So in a way, yes it will "detect" (or rather predict) it. For example, last trade was at 100.00 and dom is 99.99 x 100.00. You are watching DOM and notice that it just moved to 99.95 x 99.97 ... Can you predict what your candle will show next? Note that your candle reflects all the trades in real time, not when clock changes. Clock change simply closes the bar at last trade price and the next trade will open the new bar at the price of that trade. If this is confusing, take a piece of paper and start plotting trades from time and sales window one by one into 1 second candles.
This is an absolutely pointless kind of manual trading, quantum robots can successfully solve a similar problem, they are inexpensive, from 70 thousand dollars, and you can easily use this product.
The DOM simply shows bid and ask prices as they oscillate between prive levels, as qlai has said above. In practical terms, if you're looking at the DOM trading range, it's not different from looking at the actual candles as they churn up/down. The slight difference between one and the other could simply be because, as one candle closes, the In my opinion the only analytical relevance it has is that it shows you, well, the depth of the market: where are the orders concentrated or where there is lack of interest/potential activity. If you're looking to trade the DOM, tape reader style, I suggest you either switch to a renko or tick chart (that way you'll have a visual representation of price oscillations regardless of time) or you go downright into the times and trades in order to monitor it against the DOM. In that case, you'll need to filter lot sizes in order to spot unusually big orders, which will signal to you that a big move might be on the making. The DOM on its own, though, is not really useful for analysis IMO.
Doesn't really work for anything other than scalping small amounts. Yes, there might be HUGE buying support at $10.00, but might be real, might be all cancelled, might get someone wanting out with 10x's that volume that just blows straight through it. I came to the conclusion, too many games played, too much of a distraction don't watch it.
Why sometimes DOM has 10 levels and then next day it will only have 1 level? Yes I know it should be according to how much volume is being traded, it is only 10 levels or one....This morning on the ES there was great volume, but only one level. watching the DOM bounce up and down and changing 1 second before the bar close, Yes, I find it very distracting,,,,not saying that you can't use it but not much luck so far..Woodies cci..very successful..Someone direct me to a you tube video of someone actually using DOM and placing trades...All you can find is someone explaining how DOM works, just like 99.9% of all other videos you find but no one showing how to use what they show.....I will keep watching DOM until it makes sense..Was anyone else trading mes2019 this morning? how many levels of DOM did you see on the board?
First, you need to understand that after hours market like pre market is a different kind of market, so from the bell it's somehow a new chart, that's why taking some profits before the market closes is a good thing to do. Second, if the DOM doesn't answer all your needs check out Bookmap software, it will reflect more grafically the coming of sellers or buyers and in some cases (I'm careful not to say always) will help you to determine if people pulling their offers or not.