CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% 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.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
In forex trading, 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, organised 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.
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 towards 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, 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.
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.
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.
Forex.com scored best in our review of the top brokers for depth of market , which takes into account 120+ factors across eight categories. Here are some areas where Forex.com scored highly in:
Forex.com offers one way to tradeForex . If you wanted to trade EURUSD
The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.
Forex.com have a AAA trust score . This is largely down to them being regulated by Financial Conduct Authority, segregating client funds, being segregating client funds, being established for over 19
|Regulated by||Financial Conduct Authority|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how Forex.com? We’ve compared their spreads, features, and key information below.
|USD/JPY Spread||0.90||DAX Spread||250.0|
|FTSE 100 Spread||150.0|
|Platform||MT4, Web Trader, NinjaTrader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR|
|Funding options||Bank transfer, Cheque, DebitCard,|