Market Depth Gives Stock Traders the Edge
The order book displayed by heatmap completes the picture by revealing 100% of the markets data, which in many cases can explain why the trades occurred as they did. This is because many traders are using order book information for making trading decisions, which in turn invites more sophisticated algorithmic traders and transforming this action-reaction process into a game.
dxFeed Bookmap has developed an innovative way of viewing the information that is not available in other trading platforms. The evolution of the entire order book in real-time displayed in heatmap (Bookmap = Order Book + Heat Map) is in the core of Bookmap. In a sense, it visualizes additional 3rd dimension of the data on a 2-dimensional chart.
Pushing the boundaries of financial data analysis dxFeed Bookmap has numerous indicators and add-ons, such as the option to look for hidden orders or icebergs. It’s possible to track the history of a particular market maker or large trader, that trades in a particular direction using an execution algorithm. This data can be used to anticipate how they will affect the market.
In the example below, a large trader sets significant amounts of buy orders near the best ask price, causing the price to move up. As we can see in the high resolution snapshot, the trader randomly varies the sizes of orders, their prices, and their timing, to be undetected by other algorithmic traders. But this activity is easily spotted with a single glance at dxFeed Bookmap chart.