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Market Depth

Overview​

Market Depth (also known as Level 2 data or Order Book) provides real-time visibility into the supply and demand for a stock by displaying all pending buy and sell orders at different price levels. This powerful feature helps traders make more informed decisions by understanding the market's liquidity and potential price movements.

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Market Depth is a premium feature available only for Pro plan and above subscribers.

Understanding Market Depth​

What is Market Depth?​

Market Depth shows you the number of shares waiting to be bought or sold at various price levels. It provides transparency into:

  • Supply and demand at different price points
  • Market liquidity - how easily you can buy or sell without affecting the price
  • Support and resistance levels based on order concentration
  • Potential price movements based on order imbalances

Subscription Tiers​

Market Depth access varies by subscription level:

  • Basic Plan: Not available
  • Pro Plan: Access to 5 levels of market depth
  • Elite Plan: Access to 10 levels of market depth

Higher levels provide deeper insight into the order book, allowing you to see more price levels and better understand market dynamics.

Market Depth Display​

Layout Structure​

The Market Depth display is split into two sections:

Left Side - Bid Orders (Buy Side)​

The left panel shows pending buy orders (bids):

  • Orders are listed from highest to lowest price
  • The top row shows the highest bid price (best buy price)

Right Side - Ask Orders (Sell Side)​

The right panel shows pending sell orders (asks):

  • Orders are listed from lowest to highest price
  • The top row shows the lowest ask price (best sell price)
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  • The spread (difference between best bid and best ask) indicates market liquidity
  • Prices higher than the previous close are displayed in green
  • Prices lower than the previous close are displayed in red
  • Prices equal to the previous close have a dotted underline

Column Headers​

Each side displays the following columns:

  1. VPC (Volume Per Count) - Optional column, visible when "Show VPC" is enabled

    • Shows the average volume per order at each price level
    • Calculated as: Total Volume ÷ Number of Orders
    • Helps identify significant orders
    • The largest VPC at each price level is marked with an asterisk (*)
    • Can be displayed in units or lots (when "Use Lots Size" is enabled)

  2. # (Count) - Number of individual orders at that price level

    • Shows how many separate orders exist
    • Higher counts may indicate retail interest
    • Lower counts with high volume may indicate institutional orders

  3. VOL (Volume) - Total volume (number of shares) at that price level

    • Shows the total quantity available at each price
    • Can be displayed in units or lots (1 lot = 100 units)
    • Updated in real-time with recent changes shown in parentheses
    • Example: 80.4K(+2.3K) shows volume increased by 2,300 shares

  4. Price - The price level for these orders

    • Color-coded based on the previous close price

Summary Rows​

At the top of each column, you'll see summary totals:

  • Total Count: Sum of all order counts across visible levels
  • Total Volume: Sum of all volumes across visible levels
  • These totals update in real-time as orders change

Visual Indicators​

Volume Bars​

Each row has a background bar that represents the relative volume:

  • The bar width is proportional to the volume at that price level
  • The largest volume across all visible levels gets the widest bar (100%)
  • Helps quickly identify where most liquidity is concentrated

Real-Time Updates​

Market Depth updates in real-time during trading hours:

  • Recent volume changes are displayed in parentheses
  • Example: 50.9K(+1.2K) indicates 1,200 shares were added
  • Changes can be positive (+) for additions or negative (-) for reductions
  • Helps you spot sudden order flow changes

Features and Settings​

Show VPC​

Toggle the VPC (Volume Per Count) column on or off:

  1. Check or uncheck the "Show VPC" checkbox above the market depth display
  2. When enabled, an additional column appears showing the average volume per order
  3. This helps identify potentially significant orders or institutional activity

Use Case: Large VPC values may indicate institutional, while small VPC values suggest retail participation.

Use Lots Size​

Switch between displaying volumes in units or lots:

  1. Navigate to Settings (click the settings icon in the navigation bar)
  2. Check or uncheck "Use Lots Size (1 Lot = 100 units)"
  3. When enabled, all volumes are divided by 100
  4. Applies to both the Market Depth display and VPC calculations

Example:

  • Volume in units: 80,400 shares
  • Volume in lots: 804 lots (80,400 ÷ 100)

How to Read Market Depth​

Basic Reading​

  1. Identify the Spread

    • Look at the best bid (top of left side) and best ask (top of right side)
    • The difference is the spread - tighter spreads indicate better liquidity

  2. Assess Liquidity

    • Check the total volumes on both sides
    • Higher volumes indicate easier entry/exit without affecting price
    • Look for volume concentration at specific price levels

  3. Find Support and Resistance

    • Large volumes at specific price levels act as support (bid side) or resistance (ask side)
    • Price may stall or reverse at these levels due to order concentration

Advanced Reading​

  1. Order Imbalance

    • Compare total bid volume vs. total ask volume
    • Higher bid volume may suggest upward pressure
    • Higher ask volume may suggest downward pressure

  2. VPC Analysis

    • High VPC values may indicate institutional orders
    • Clusters of high VPC at specific prices may signal key levels
    • The asterisk (*) marks the highest VPC for quick identification

  3. Order Flow Changes

    • Watch for sudden volume increases (shown in parentheses)
    • Large additions may indicate incoming institutional interest
    • Large removals may indicate cancelled orders or filled trades

  4. Depth Profile

    • Uniform distribution suggests natural market activity
    • Concentration at specific levels may indicate support/resistance
    • "Walls" (very large orders) may prevent price movement

Important Notes and Limitations​

Real-Time Data​

  • Market Depth displays real-time data for Pro and Elite subscribers only
  • Updates occur continuously during market hours
  • Data reflects actual pending orders in the market
  • Orders can be added, modified, or cancelled at any time

Order Visibility​

  • Only visible limit orders are shown in Market Depth
  • Market orders execute immediately and don't appear
  • Hidden or iceberg orders are not visible
  • Some institutional orders may be hidden from the order book

Market Manipulation Awareness​

Be aware of potential manipulative practices:

  1. Spoofing: Large orders placed and quickly cancelled to manipulate perception
  2. Layering: Multiple orders at different levels to create false impressions
  3. Order Walls: Large orders intended to intimidate rather than execute

Always combine Market Depth analysis with other technical indicators and fundamental analysis.

Data Accuracy​

  • Market Depth reflects the current state of the order book
  • Orders can change rapidly, especially in volatile markets
  • By the time you react, the order book may have changed
  • Use as one tool among many in your analysis toolkit

Best Practices​

  1. Combine with Other Tools

    • Use Market Depth alongside price charts and technical indicators
    • Consider fundamental analysis and news events
    • Don't rely solely on order book data

  2. Start with Liquid Stocks

    • Practice reading Market Depth on highly liquid stocks
    • More volume provides clearer signals
    • Thin markets can have misleading order books

  3. Monitor During Active Hours

    • Market Depth is most meaningful during active trading hours
    • Early morning and late afternoon may show different patterns
    • Consider market open and close dynamics

  4. Practice Reading Speed

    • Market Depth requires quick interpretation
    • Practice identifying key levels at a glance
    • Develop a systematic approach to reading the data

  5. Document Your Observations

    • Keep notes on how Market Depth behaved before price moves
    • Learn from patterns you observe
    • Build your own understanding of order flow in your preferred stocks

Frequently Asked Questions​

Q: What's the difference between 5 and 10 levels of Market Depth?​

A: Pro subscribers see 5 price levels on each side (bid and ask), while Elite subscribers see 10 levels. More levels provide deeper visibility into the order book, allowing you to see support/resistance further from the current price and better understand overall market structure.

Q: Why does the volume sometimes show a number in parentheses?​

A: The number in parentheses shows the recent change in volume at that price level. For example, 80.4K(+2.3K) means the volume increased by 2,300 shares in the last few seconds.

Q: What does the asterisk (*) next to VPC mean?​

A: The asterisk (*) marks the price level with the highest Volume Per Count (VPC) on that side. This indicates where the largest average order size exists, potentially signaling institutional interest.

Q: Can I trade directly from the Market Depth display?​

A: Currently, the Market Depth feature is for viewing and analysis only. To place trades, use the trading interface provided by your broker. However, Market Depth helps you choose optimal entry and exit prices.

Q: Why do I see different colors for the prices?​

A: Price colors indicate the relationship to the previous close:

  • Green: Price is higher than previous close
  • Red: Price is lower than previous close
  • White with dotted underline: Price equals previous close

Q: How often does Market Depth update?​

A: Market Depth updates in real-time during trading hours. Changes appear immediately as orders are added, modified, or cancelled in the market.

Q: What happens when an order is filled?​

A: When an order is fully filled (executed), it disappears from the Market Depth. If partially filled, the remaining volume is displayed. This is why you see volume changes in real-time.

Summary​

Market Depth is a powerful tool that provides transparency into market liquidity and order flow. By understanding the supply and demand at different price levels, traders can:

  • Make more informed entry and exit decisions
  • Identify potential support and resistance levels
  • Assess market liquidity before placing large orders
  • Monitor institutional activity through VPC analysis
  • Detect potential price movements through order imbalances

Remember that Market Depth is just one tool in your trading toolkit. Always combine it with other forms of analysis, maintain proper risk management, and practice reading the order book before making trading decisions based on it.

For optimal results, upgrade to the Elite plan for access to 10 levels of Market Depth, providing the most comprehensive view of the order book available.