How Market Depth Works
Understanding the Mechanics of Market DepthMarket depth is a crucial concept in understanding how trading works in financial markets. Essentially, market depth refers to the ability to see the supply and demand for a particular asset at different price levels. By looking at market depth, traders can gain insights into the liquidity of an asset and the potential price movements in the near future.
When we talk about the mechanics of market depth, we are referring to how this information is displayed and how traders can use it to make informed decisions. Market depth is typically shown in a market depth chart, which displays the order book for a particular asset. This order book includes all the buy and sell orders at different price levels, allowing traders to see where there is strong su...