What is market depth?
Whenever brokers are trading through the electronic communications network, they are issued with access to information which is important that relates to the transaction volumes that are being traded within the forex market. The depth of the market is defined as the currency volume, which is available for transaction at a certain point in forex market times. When using the ECN, cfd trading South Africa brokers will be in a position to gauge the best possible bid and ask prices, that are relevant to their limit orders.
The depth of the market will be able to list all the available orders that the traders are willing to execute on the forex market. When a limit order gets matched with another one, a trade will be executed and the two limit orders will get removed from the depth list of the market. The transaction which gets executed will then get recorded in the forex market history of trading.
The order flow trading importance
The currency prices don’t move based just on the moving averages of technical indicators. In case a currency price has to move, a limit order has to be matched with another one. when enough limit orders get executed, the currency price will then move on the price chart, reflecting the transactions.
Because of that, to be able to understand the trading flow, you have to understand about anticipating the manner in which the other traders in the market behave, placing yourself in a position that is advantageous. The order flow trading is less about figures and numbers than it is with predicting the behavior of other trades that are within the market, by analyzing thoroughly the different scenarios, mentalities which are prevailing and the expectations which are within the market.
While the technical analysis might move the prices of a currency in certain instances, the reality is that, it doesn’t take into account whether the limit orders that are appropriate will be available for a trade to be able to get executed. By use of technical analysis, it might lead to losses because the limit order might expire or get triggered before there is movement in the market that favors you.
Benefits of the demo ECN accounts forex
To trade can be regarded as a financial risk when the trader is unable to get to know the market trend. Success mostly lies in a continuous practice. If you practice using the demo account, then it is possible to become perfect when it comes to demo trading. It opens doors for first investment to make a trade. Some of the benefits that you get include:
- No risk to lose money that is retained
- It improves the skills which exist
- It improves the confidence you have to a higher level
The forex ECN account has various other benefits. It is important that you pick an ECN broker who is reliable.
What you need to remember
- To get a reliable ECN broker is key. That is because brokers do consolidate in a different way in participation in the market form all the various parts of the industry.