The order book and the DOM

The order book is the live list of resting limit orders waiting to be filled: bids stacked below the current price, offers (asks) stacked above it. The tool that displays it is the DOM — depth of market, sometimes shown as a vertical ladder.

What you see on the ladder

• Price levels running vertically.
• Bid sizes on one side: how many contracts/lots are resting to buy at each price below the market.
• Ask sizes on the other: how many are resting to sell at each price above the market.

The book shows resting limit orders — passive liquidity. It does not show market orders, which are the aggressive orders that actually consume that liquidity and move price. Keep that distinction: the book is intent to trade if price comes here, not trades.

What the DOM can suggest

• Where liquidity sits. Large resting size at a level can act as temporary support or resistance.
• Imbalance. Much more size bid than offered (or vice versa) hints at pressure — but read on for the catch.

The big caveats (be honest)

• Resting orders can be pulled instantly. A wall of size you see may vanish the moment price approaches it. The book is a snapshot of current intentions, not commitments.
• Availability. A genuine DOM requires a centralized order book — standard on futures and many equities. In spot forex there is no single book; your platform shows at best your broker's or an aggregator's liquidity, not the whole market.
• Spoofing exists (covered later): visible size is not always sincere.

Treat the DOM as one input about where liquidity is, cross-checked against what actually trades on the tape.