Video: An Invisible Force on Every Trade
05/17/2012 10:12 am EST
The concept of depth of market execution (DOME) is at work in the markets every day, explains Hubert Senters, but not all traders have a deep enough understanding of its impact.
DOME stand for depth of market execution. It can be pretty overwhelming if you don't understand that it's basically just one big game of liar’s poker.
A bid is just that: a bid; it is not a buy order. It's an implied buy, but until it gets filled, it means nothing. Likewise, an ask price is just a wishful sell order until it gets filled.
Homes are listed by the homeowner for the price they want, but do they always get that price? Not likely (especially in this market)!
Watch the video below for a better understanding of the DOME:
By Hubert Senters, co-founder, TradeTheMarkets.com