DislikedJust putting this out to the scalpers:
(1) does anyone use Depth of Market (DOM) indicators to scalp?
(2) how effective are DOMs in scalping news (e.g. like NFP tonight)?
(3) Which broker offers good DOM analysis? I've d/led MBTrading demo which has DOM but still try to make heads or tails of it...
ChngsterIgnored
because some brokers control what you see and what you get.
With STP from an ECN, if you're trading any kind of size, you should see
the number of lots bid or offered increase/decrease as you hit or join
those bids/offers. If that's not happening in real time, your DOM is phoney.
With futures it's a little different. Since everything nowadays is fairly much "E" traded,
bids and offers are matched on a first entered, first filled basis. So if I join
the offer ahead of you with 3 contracts, then you join selling 5 at that same price
and then an order buying 5 at our price hits our offers, I'll sell my 3 and you'll sell 2,
leaving the rest to be filled by the next bid. Maybe you already know all that.
Regarding NFP and other news releases:
The DOM goes apeshit.
a few seconds before the release, (almost) all the bids/offers "disappear".
If you we're looking to get filled a hundred points away, this is you chance.
A stray market order hitting your price is either your good fortune or your misfortune.
The fills are so wild and unpredictable that anything can happen.
Here's what things look like under "normal" conditions:
(you'll notce 4 contracts bid by 1 offered and 4 more behind it.)
Ordinarily, the market can be moved (however temporarily) by a few contracts
when conditions are quiet and thin like now.
As far as spot fx, again, it depends who's pulling the strings (or pulling your chain).