The market depth indicator shows that:
- the last trade occurred at a price of 65.26;
- and at this same 65.26 level, there are 425 contracts listed for sale;
- at the level just below, at a price of 65.25, there are 100 contracts listed for purchase.
The screenshot illustrates a situational advantage for buyers in the market: a bullish candle with an expanding spread, and the last price is at its maximum. Apparently, the last trade reflected a situation where a market buyer took the initiative and purchased the contracts offered for sale.
For the price to move above the 65.26 level, buyers need to buy all 425 contracts offered at this price and continue buying.
The Depth of Market is a “live“ market indicator. It presently reflects the authentic sentiment of market participants, as expressed through their buy and sell orders. While charts represent the chronology of past events, the Depth of Market indicator is valuable as it provides immediate and up-to-the-minute information.
The more contracts are placed, the higher the liquidity, and the “deeper“ the market (or order book). By the way, in English, liquidity literally means fluidity or flow. Perhaps the terms “depth” and “liquidity” are related in this sense? Who knows?