All lessons
Liquidity and order flow
A candle shows the result of trading. It does not reveal every order, every cancellation or every trader’s intention.
Separate observed orders from inferred trading interest.
Liquidity concerns the ability to trade a given size at an acceptable cost. A tight quoted spread is only one clue. Available depth, resilience after trades and actual fills also matter, especially for larger orders.
An order book shows displayed interest at a particular venue or provider. Orders can be added or cancelled. Executed trade data describe transactions that occurred; neither dataset reveals every participant's intentions or every hidden order.
Retail OTC Forex charts do not expose all worldwide orders. A prior high may be a sensible place to investigate possible stop activity, but drawing a line there does not prove how many stops exist. Label observations and hypotheses separately.
Let’s use numbers · hypothetical example
Hypothetically an order book displays 100 units at the best offer, but you want 300. If only 100 remain available, the rest may fill at higher prices or not fill, depending on order type. The best displayed price is not the price for every size.
Keep in mind
Displayed depth can disappear. A visible price sweep cannot by itself prove manipulation or identify an institution.
Your turn
Make two columns for a chart event: directly observed prices or trades, and interpretations that require additional evidence.
A quick check before we move on
What does a displayed limit order establish?
- Displayed interest at that venue at that moment
- A guaranteed future execution
- All global buying interest
Check answer
Displayed interest at that venue at that moment The order can change or cancel, and the feed covers only its specified market.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
