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spot Forex to Futures trading transition and DOM trading


#1

Recently I switched from spot Forex to Futures trading. I understand that one of the advantages of trading Futures is the Transparency of the book and of the actual volumes traded at each price. I understand that the DOM shows the book and that Numbers Bars charts (Footprint charts?) show how much was traded at each price but I’m struggling to understand the difference between the values that I see on the DOM and on the Numbers Bars charts. Also I keep on bumping into the expression “Order Flow”.

Could anyone here please direct me to some good instructional material about those subjects?

Regards,
David JKL


#2

Just like you wrote, the DOM visualizes the Book and Numbers Bars/Footprint charts show what actually traded at each price. What this means is that the DOM displays the number of contracts waiting as Buy limit Orders (Bids) and as Sell limit orders (Asks). Those are pending orders waiting to get filled against Market Orders. The Numbers Bars/Footprint charts show the number of contracts that were actually bought or sold with Market orders against the waiting limit orders. Here is an article that explains this very thoroughly – Order Flow Fundamentals in Futures Trading

Thank you,
Optimus Futures
www.optimusfutures.com