For many traders, monitoring order flow has become a crucial component of their technical analysis. NinjaTrader’s Order Flow + tool suite includes a Market Depth Map indicator to help traders identify supply and demand. Through a chronological display of order flow trading activity plotted behind the price bars, traders can visualize a historical and real-time view of market depth.
How the Market Depth Map Works
Once applied to a chart, the Market Depth Map indicator plots the progression of the limit order book in real-time. As the chart advances, more historical market depth information becomes visible behind past price bars.
In the chart above, the Market Depth Map indicator was applied at approximately 10:28, and historical market depth data is plotted from that point forward.
- The areas with the highest opacity indicate the highest market depth volume
- The areas with the lowest opacity indicate the lowest market depth volume
- Real-time market depth is shown in the area to the right of the last price bar
Identify Support and Resistance
Viewing historical and real-time market depth data can help traders identify significant price levels. The chart below demonstrates how the Market Depth Map indicates potential support and resistance areas prior to a price reaction.
As with all indicators, false signals can occur and traders should employ appropriate risk management measures.
Customize the Market Depth Map
As with many of NinjaTrader’s charting tools, the Market Depth Map can be customized to users’ preferences. A custom display is demonstrated below with bid depth shaded green and ask depth shaded red.
Get Started with Order Flow +
The Order Flow + suite of premium features available for NinjaTrader 8 provides tools to analyze trade activity using order flow, volumetric bars & volume profile.
Current NinjaTrader users can get started with the Market Depth Map and the rest of the Order Flow + suite today: Learn More
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