As a description of what is displayed right now, yes. As a description of what will happen, no. Displayed orders are cancellable and hidden size exists, so the ladder is a partial and impermanent view that has to be confirmed by executions.

What is the difference between Level 2 and Level 3 data?

Level 2 gives aggregated quantity per price. Level 3, sometimes called market by order, gives each individual order and its queue position, which is what makes iceberg detection direct rather than inferred. Level 3 is considerably more expensive and not available everywhere.

Can you trade from the DOM alone?

Some do, and it demands a great deal of screen time for a modest and fragile edge. The ladder shows the present with no context: no levels, no acceptance history, no session structure. Most order flow work uses it as the confirmation layer at a level identified elsewhere.

Glossary

Depth of market (DOM)

Also called: DOM · ladder · order book · Level 2

The depth of market is the list of resting limit orders at each price, right now. It shows what participants are advertising, not what they have done. Displayed size can be cancelled in a millisecond, so a DOM is a menu of promises — the executed columns are the receipt.

What it shows and what it hides

A ladder displays quantity resting at each price on both sides. It has no memory, no history, and no obligation behind it. Everything on it can disappear before it is touched, and frequently does.

It also hides size in the other direction: iceberg orders display a fraction of their real quantity. So the DOM understates some levels and overstates others, in both cases without telling you which.

The rule that survives everything

Believe what trades, not what is displayed. Most platforms show recently executed volume alongside displayed size for exactly this reason. Those executed columns are the only part of a ladder describing something that actually happened.

It follows that a large displayed order proves nothing until it has been tested. What informs is the behaviour at contact: filled and replenished, filled and gone, or evaporating before price arrives.

Pulling and stacking

Pulling is liquidity withdrawn before contact — often leaving an air pocket behind it. Stacking is size added as price approaches, which reads as a defence.

Neither is necessarily manipulation. Market makers manage inventory continuously and cancel constantly; a pull is not automatically a spoof.

A worked example

On a synthetic ES snapshot, an 840-lot offer sits two ticks above the market — impossible to miss — with zero contracts executed against it.

One tick below the best bid, a level displaying 60 lots has executed 1 480. The order everybody can see has done nothing; the one nobody notices has done all the work.

The trap

Trading the wall. A large displayed order is the single most visible thing on a ladder and the least reliable. It can be genuine, it can be withdrawn on approach, and it can be there precisely to be seen.

The tell that costs nothing to learn: **price reacting before reaching a wall** usually means the wall was bait. Real resting size gets tested. Size that is never touched has proved nothing at all.

Frequently asked

Is the DOM reliable?: As a description of what is displayed right now, yes. As a description of what will happen, no. Displayed orders are cancellable and hidden size exists, so the ladder is a partial and impermanent view that has to be confirmed by executions.
What is the difference between Level 2 and Level 3 data?: Level 2 gives aggregated quantity per price. Level 3, sometimes called market by order, gives each individual order and its queue position, which is what makes iceberg detection direct rather than inferred. Level 3 is considerably more expensive and not available everywhere.
Can you trade from the DOM alone?: Some do, and it demands a great deal of screen time for a modest and fragile edge. The ladder shows the present with no context: no levels, no acceptance history, no session structure. Most order flow work uses it as the confirmation layer at a level identified elsewhere.