Best Depth of Market Forex Brokers
May 09, 2022
Last modified May 10, 2022
Depth of Market
In forex, depth of market (DOM) shows the levels of a particular currency that are being traded at different prices. This allows traders to understand the supply and demand, and therefore liquidity of the currency at each price point. A good depth of market means that there will be good liquidity. Where the market depth is low, or poor, there is less liquidity, and this means that a large order has the potential to affect the price.
Liquidity is important to traders who want to take advantage of short-term movements, and therefore want to be able to sell at a moment’s notice. Market depth data is therefore valuable for giving the trader an indication of how quickly they will be able to liquidate their position.
Pending orders are also included in the data, which is why it is also known as the order book. As an example of how the order book works; if the current price is $10, the order book will show how many orders are pending at $9, $11, etc. It doesn’t just show the bid and the ask prices, but also the volume of all bids and offers, in real-time, organized by price level.
Market depth is also an efficient way to check the activity of a particular currency, and traders can find out if there is enough depth and volume to complement their trading style at that given time.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 65% and 82% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Best Depth of Market Forex Brokers
Here are the best depth of market forex brokers.
- IG - 9.7/10 Overall
- Saxo Bank - 9.5/10 Overall
- CMC Markets - 9.4/10 Overall
- Interactive Brokers - 9.2/10 Overall
- TD Ameritrade - 8.9/10 Overall
- FOREX.com - 8.7/10 Overall
- XTB - 8.7/10 Overall
- City Index - 8.7/10 Overall
- Swissquote - 8.5/10 Overall
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 0.828 (September 2021) |
| All-in Cost EUR/USD - Active | 0.365 (May 2020) |
| PayPal (Deposit/Withdraw) | Yes |
| Skrill (Deposit/Withdraw) | No |
| Visa/Mastercard (Credit/Debit) | Yes |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 0.8 (August 2020) |
| All-in Cost EUR/USD - Active | 0.6 (August 2020) |
| PayPal (Deposit/Withdraw) | No |
| Skrill (Deposit/Withdraw) | No |
| Visa/Mastercard (Credit/Debit) | Yes |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 0.73 (August 2021) |
| All-in Cost EUR/USD - Active | N/A |
| PayPal (Deposit/Withdraw) | Yes |
| Skrill (Deposit/Withdraw) | No |
| Visa/Mastercard (Credit/Debit) | Yes |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 0.6 (From 09/25/21 - 10/02/21) |
| All-in Cost EUR/USD - Active | 0.6 (From 09/25/21 - 10/02/21) |
| PayPal (Deposit/Withdraw) | No |
| Skrill (Deposit/Withdraw) | No |
| Visa/Mastercard (Credit/Debit) | No |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 1.26 pips (August 2021) |
| All-in Cost EUR/USD - Active | 1.26 pips (August 2021) |
| PayPal (Deposit/Withdraw) | No |
| Skrill (Deposit/Withdraw) | No |
| Visa/Mastercard (Credit/Debit) | No |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 1.1 (US August 2021) |
| All-in Cost EUR/USD - Active | 1.1 (US August 2021) |
| PayPal (Deposit/Withdraw) | Yes |
| Skrill (Deposit/Withdraw) | No |
| Visa/Mastercard (Credit/Debit) | Yes |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 0.9 (Q3 2021) |
| All-in Cost EUR/USD - Active | 0.9 (Q3 2021) |
| PayPal (Deposit/Withdraw) | Yes |
| Skrill (Deposit/Withdraw) | Yes |
| Visa/Mastercard (Credit/Debit) | Yes |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | 1.1 (August 2021) |
| All-in Cost EUR/USD - Active | 1.1 (August 2021) |
| PayPal (Deposit/Withdraw) | Yes |
| Skrill (Deposit/Withdraw) | No |
| Visa/Mastercard (Credit/Debit) | Yes |
Trust Score
Highly Trusted
Cost & Fundingexpand_moreexpand_less
| Average Spread EUR/USD - Standard | -1 |
| All-in Cost EUR/USD - Active | -1 |
| PayPal (Deposit/Withdraw) | Yes |
| Skrill (Deposit/Withdraw) | Yes |
| Visa/Mastercard (Credit/Debit) | Yes |
Why it Matters
All the information that DOM provides can be useful for determining whether to place an order. Market depth data allows traders to understand whether the market is weighted toward buy orders or towards sell orders. If more buy orders are open than sell orders, for example, the share price may start to increase because of the increased buying support. However, when there are more sell orders, the price tends to weaken due to the selling pressure.
Knowing these resistance and support levels can help traders to establish their entry and exit points.
Brokers that offer Depth of Market
The MT5 trading platform displays depth of market data, and is available from regulated brokers such as Roboforex, Exness, and Forex4You, amongst others.
Trading with a regulated broker is always preferable to using a broker that is not regulated, and therefore not bound by the high standards set out by regulators.
Conclusion
It is recommended to invest time into learning how depth of market works as this can provide traders with indications about market conditions. However, traders need to bear in mind that not all orders get reflected in an order queue. Some traders (usually who execute large volumes of trades) manage to hide the size so that other traders do not get alerted.
Nonetheless, a study of depth of market can help spot support and resistance levels along with other useful information related to the market.
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Forex Risk Disclaimer
There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Learn more.
About the Author
Marcus Taylor
BrokerNotes was founded in 2014 by Marcus Taylor, founder and CEO of Venture Harbor, a venture studio in Oxford that develops innovative online tools & technology across a range of sectors.
