DOM (Depth of Market), also known as the order book or Level 2 data, is a real-time display of all pending buy and sell orders at various price levels for a particular financial instrument. It shows the number of contracts or shares available at each bid and ask price, giving traders insight into supply and demand dynamics and potential support or resistance zones. Active traders and scalpers use the DOM to gauge market liquidity and anticipate short-term price movements.
Example
“The scalper watched the DOM and noticed a large cluster of buy orders at the $50 level, suggesting strong support that would likely hold on a pullback.”