Depth of market, and how to read it.

An exchange keeps a list of every resting limit order. Buy orders, called bids, wait below the current price. Sell orders, called offers or asks, wait above it. The highest bid and the lowest offer are the best bid and best offer, and the gap between them is the spread.

Market data is often described in levels:

• Level 1 is the best bid, the best offer, their sizes and the last trade. It is what most price feeds provide.
• Level 2, or market depth, adds the resting size at further prices above and below the market. This is what a DOM displays.

How many levels you see depends on the exchange and the data product. Depth is a property of centralised markets such as futures exchanges. Spot forex has no single book, and in crypto each venue has its own.

Most platforms show depth as a vertical price ladder. The middle column lists prices, one tick apart. Bid size sits in a column on one side, offer size on the other, and the current price is highlighted where the two meet. Many ladders add columns for volume traded at each price in the session, recent trades, or your own working orders.

Unlike a chart, the ladder does not move sideways through time. Prices stay fixed on screen and the numbers change around them, which makes it easy to see size being added or removed at a specific price.

Stacking. Size building on the bid below the market, or on the offer above it, shows participants willing to trade at those prices. It can slow price as it approaches.

Pulling. Size that disappears as price gets close was cancelled, not filled. A book that looks heavy but empties on approach is a warning that the level may not hold.

Refreshing. A price where the offer keeps trading and keeps being replenished suggests a larger seller working an order, perhaps an iceberg that shows only part of its size. The same can happen on the bid.

Thin books. When there is little size near the market, a modest market order can move price several ticks. Thin conditions are common around news and outside main sessions.

Read it with the tape. Time and sales, or the tape, lists every trade as it prints. The DOM shows intent; the tape shows what actually traded. A large bid that holds while the tape shows heavy selling into it is absorption. The same information across time is what a footprint chart summarises.

Illustrative scenario, not a trading rule. A trader has marked the prior session's low as support and is watching the ladder as price falls towards it.

• A few ticks above the level, the bids are ordinary. Price trades down through them without much pause.
• At the level itself, the bid is noticeably larger than the prices around it. The trader watches that number rather than the whole ladder.
• Price reaches the level. The tape shows a run of sell orders trading at that bid. The bid size drops, then refills, drops again, then refills again.
• Sellers slow down. The offers just above the level start to thin, and the first buy orders lift the offer.

That sequence, selling into a bid that keeps refreshing, followed by buyers lifting the offer, is a classic absorption read. The opposite sequence would be the bid shrinking as price approaches and vanishing before it trades, with price slicing through the level. The ladder did not say which would happen; it showed which one was happening, a few seconds sooner than the chart could.

• Orders can vanish. Resting orders can be cancelled at any time, and some are placed to mislead. Spoofing is prohibited on regulated exchanges, but traders still treat displayed size as intent rather than a promise.
• Hidden liquidity. Iceberg and non-displayed orders mean the true size can be larger than shown.
• Snapshot only. The ladder shows now. For how liquidity built up or moved over time, traders use a liquidity heatmap.
• Speed. In fast markets the book changes faster than anyone can read, which is why many traders combine it with fixed levels such as VWAP or the point of control.

A DOM is most useful at a level you already care about. It helps answer one question: when price gets there, is the other side really present?

Mizora Pro has a DOM ladder and time and sales in its order flow workspace, alongside the footprint, delta, imbalances and a liquidity heatmap.

Two points to be clear on. First, the workspace is in Beta and modelled from live prices, not exchange depth. Mizora Pro does not provide level 2 exchange depth, so the ladder is a model of liquidity around price, not the real exchange book. Second, the ladder is a reading tool. You place orders from the order ticket, with market, limit, stop and bracket orders, or with Shift+B and Shift+S. How orders work.

You can study it on a free $50K practice account. Mizora Pro accounts trade simulated capital.