What Depth of Market Skew Really Shows You
DOM skew—when one side of the book shows more resting orders than the other—is one of the most misunderstood signals in futures trading. Traders stare at the bid and offer numbers like they’re gospel, but most of the time that “skew” is either bait, noise, or meaningless size placed by algos that have zero intention of getting filled.
What DOM Skew Actually Measures
DOM skew is simply an imbalance in the displayed resting liquidity on the bid vs the offer. That’s it. It doesn’t automatically predict direction, and it doesn’t tell you who’s stronger.
- More bids than offers → passive buyers present
- More offers than bids → passive sellers present
- Sudden size spikes → often spoofing or hedging behavior
To interpret DOM skew properly, you need to understand tick ladder behavior because the ladder reveals aggression—not just what’s sitting there.
Why DOM Skew Is Often Fake
A huge portion of visible DOM is spoof liquidity. It appears, disappears, shifts levels, or trails price. Algorithms place this liquidity to influence trader behavior, not to be executed.
| DOM Behavior | Real Meaning |
|---|---|
| Large bids appear below price | Support bait, not certainty |
| Large offers flash then vanish | Algo manipulation |
| Stacked book on one side | Passive interest, not guaranteed direction |
This is why staring at size without watching aggressor activity is useless.
The Only DOM Skew That Matters
There are only two situations where DOM skew has real meaning:
1. When Skew Persists During Aggressive Flow
If the bid stays stacked AND buyers keep lifting offers, that’s real strength.
2. When Skew Holds During a Sweep
If sellers sweep bids and the bids instantly refill, that’s genuine support—not spoofing.
This is where DOM skew aligns with DOM structure behavior.
How to Read Skew Without Getting Manipulated
Ignore the raw numbers. Watch how price reacts to the skew.
- If price moves into stacked bids and bounces → real
- If the stacked bids vanish on approach → spoof
- If offers stack and price can’t push through → resistance
- If offers stack but disappear when tested → fake pressure
Why Most Traders Misread DOM Skew
Because they treat passive liquidity like confirmation of a trend. It isn’t. Strong markets move on aggressive orders, not passive ones. DOM skew only matters when it interacts with real trades hitting the ladder.
The Bottom Line
DOM skew is only useful when paired with actual order flow. If you just stare at the numbers, you’re reading noise. If you watch how those numbers behave when challenged, you’re reading real pressure.