Market Depth
Market depth measures the number and size of buy and sell orders at different prices within an order book.
✦ Key Insight
Deep markets generally experience lower slippage and better execution.
✕ Common Misconceptions
Assuming large walls cannot disappear
Ignoring spoofing
Detailed Explanation
How It Works
Large buy and sell walls create visible support and resistance zones.
FAQs
Does deeper liquidity reduce volatility?
Often, yes.
In Practice
Dig Deeper
Liquidity
Ease of buying/selling an asset without significantly moving its price (high liquidity = tight bid-ask spreads and fast fills).
Order Book
A real-time list of all buy (bids) and sell (asks) orders for a trading pair, showing market depth at different price levels.
Slippage
Slippage is the difference between the expected price of a trade at the time of submission and the actual executed price, caused by market movement or insufficient liquidity during confirmation.