Why Liquidity Can Disappear

A large order appears on the DOM. Seconds later, it disappears. What happened?

Displayed liquidity can change for several reasons.

The order may have been cancelled, modified, partially executed, or affected by changes in the order book.

This is why I avoid assuming that every large displayed order represents a firm intention to buy or sell at that price.

Some traders study rapid changes in displayed liquidity as part of their market analysis, but the interpretation can be difficult.

The important thing is to distinguish between orders that were displayed and trades that were actually executed.

The DOM provides a changing view of available liquidity, not a guaranteed forecast of future price movement.