Question by Johny: Can you trade an instrument without a market depth?
I guess that’s not possible – but if I want to buy a stock/futures contract and I see no market depth – then what happens? I guess my order goes from “market” to “limit” order and hangs untill someone takes it on the opposite side? I know nasdaq, nyse guarantee order execution – so market depth isn’t important there – but what about other exchanges like ASX, LSE…futures?
10x
Best answer:
Answer by relaxed_trader
Being able to see market depth (Level-II info) is very useful if you are into scalping, as that information can tell you something about what price action is likely to trigger stops (increased volatility) and where you should put your stops. Also, Level-II would inform you about market liquidity, i.e. what kind of position sizes will get an easy fill.
If you’re into long term trend trades, all this information is not really that significant, as then you’re likely enter your positions with market orders and wouldn’t really be hurt by a partial fill.
cheers
Relaxed_Trader
http://blog.forex-trading-ideas.com
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