A real-time display that shows pending buy and sell orders at different price levels for a futures contract, including the number of contracts available at each level.
Why It Matters
- 1DOM provides insight into market liquidity and order flow, helping traders make better decisions on entries, exits, and execution.
- 2It is especially useful for understanding supply and demand in fast-moving futures markets.
Example
- 1A trader views the DOM and sees large buy orders stacked below the current price.
- 2This may indicate support, influencing the trader to enter a long position or adjust their entry level.
Common Mistakes
- ✖Misinterpreting order sizes as guaranteed support or resistance
- ✖Ignoring how quickly orders can be added or removed
- ✖Relying solely on DOM without broader market context
- ✖Overreacting to short-term order flow changes