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Does 100 lots move the market?

  • #21
  • Jun 21, 2017 2:24am Jun 21, 2017 2:24am
So can 100 lots move the market by 1 pip ? if not, how big of a position size is required to do that? especially for the major pairs (eurusd gbpusd usdjpy)
  • #22
  • May 27, 2018 1:47am May 27, 2018 1:47am
If you view the market depth of eur usd (which is really the only pair worth trading) it typically has around 8 to 10 million available without any distance from the current price. It ticks and disappears, then re-appears, probably because not everyone wants their limit order visible.

If the world wide currency market trades 4 trillion per day, I estimate the eur usd to be worth about 700 billion per day.

divide 700 bills by 24 hours, thats around 30 bills

divide that by 60 minutes, thats 486 millions


now watch and see the ticks happen at least per second, so divide by 60

Thats 8mio which is approximately what you typically see in the DoM...its remarkably accurate. You could easily take 20 million without a hitch during the London open and beyond. 100 mio is easy with maybe a few pips lost, or you could buy into selling and sell into buying action. Not much higher than that without partitioning the order.
  • #23
  • May 27, 2018 3:45am May 27, 2018 3:45am
Quoting richyRich27
If you view the market depth of eur usd (which is really the only pair worth trading) it typically has around 8 to 10 million available without any distance from the current price. It ticks and disappears, then re-appears, probably because not everyone wants their limit order visible. If the world wide currency market trades 4 trillion per day, I estimate the eur usd to be worth about 700 billion per day. divide 700 bills by 24 hours, thats around 30 bills divide that by 60 minutes, thats 486 millions now watch and see the ticks happen at least...
What about if i entery with 1million lots on eur/usd few minutes before euro opened,this will go in my favour direction 100%!
  • #24
  • May 27, 2018 3:04pm May 27, 2018 3:04pm
1 million lots?

Yes, definitely will go up in the direction you are buying into

the thing we forget is that we have extreme leverage. 8 to 10 million is huge...but making billions using just currencies cannot be done without moving the market. The max you could make even with kamakazi leverage (which is what I always use) is a couple of hundred K$ per week, not millions.
  • #25
  • May 27, 2018 3:17pm May 27, 2018 3:17pm
...but I hope Im wrong, my limited research shows this conclusion, because Im on my way to 200 lots or around $2000 per pip (20 mio) but on the other hand, Nick Leason demolished Barrings bank with 800 million losses ...IN THE 80's!!! if that much can be lost, then that much could be gained??

its confusing. such a big market, but you cant really trade higher than 1 house per week. hope Im wrong, will open several ecn accounts and experiment with high values, my current ecn limits at 200 lots
  • #26
  • May 31, 2018 3:51am May 31, 2018 3:51am
Thanks for the helpful topic. I suppose that during holidays, when the market liquidity is lower than usual, we can get some special conditions to be influenced by a huge lot size over 100 lot.
  • #27
  • May 31, 2018 6:17am May 31, 2018 6:17am
I'm pretty sure the goal is to not move the market and get slippage with these big order but what do i know..Anyway i just found out my broker can handle 1000 standard lot orders I wonder how many retail traders are doing this
  • #28
  • May 31, 2018 7:08am May 31, 2018 7:08am
Quoting yanetjellen
I'm pretty sure the goal is to not move the market and get slippage with these big order but what do i know..Anyway i just found out my broker can handle 1000 standard lot orders I wonder how many retail traders are doing this
question is,do you have enaught balance on your real account to trade 1000 lots,LoL?

i enter 1000lots if i have at least 10 million euro balance..
  • #29
  • May 31, 2018 7:31am May 31, 2018 7:31am
banks and other institutions move market not lot size of retailers
  • #30
  • May 31, 2018 9:52am May 31, 2018 9:52am
Quoting pridolfx
{quote} question is,do you have enaught balance on your real account to trade 1000 lots,LoL? i enter 1000lots if i have at least 10 million euro balance..
i seriously doubt i will ever sniff anything close to trading 1000 standard lots
  • #31
  • Edited 10:26am May 31, 2018 10:12am | Edited 10:26am
Quoting JOATMON
Thanks for your candor!



At any given time the market is trading hundreds of millions. Check this article out to see the daily traded volume for the largest forex brokers.

http://www.wvwv.org/forex-brokers/la...x-brokers.html
Learn, a forex trader must, unlearn and relearn he will.
  • #32
  • May 31, 2018 11:27am May 31, 2018 11:27am
Quoting COGSx86
{quote} At any given time the market is trading hundreds of millions. Check this article out to see the daily traded volume for the largest forex brokers. http://www.wvwv.org/forex-brokers/la...x-brokers.html
Seems to be a good read Master Yoda...
  • #33
  • Jun 10, 2018 12:59pm Jun 10, 2018 12:59pm
all retail brokers answer to liquidity providers (the banks)

your retail leverage puts you right in the king position of the banks. If you have a viable system and therefore use extreme leverage, you are trading at the same level of banks and can and will move the market at 200 lots or more.

my system gives me around 100 pips per week and at 200 lots at my leverage level, I can only ever hope to make 200k usd max per week...in no way can I be a billionaire real fast trading eur usd...it world take me decades.

...still its good money, but becoming the first world trllionaire is impossible trading currencies as far as my experience shows
  • #34
  • Jun 10, 2018 5:49pm Jun 10, 2018 5:49pm
That's why the more money you have it becomes harder to make money. Not only do you have to move to higher timeframes but you have to own different assets to make full advantage of your resources. You also have to make sure the assets are not correlated, plus the liquidity concerns. Brief, the more money you have, it becomes a burden. That's why some traders just stay in one timeframe and eat the proceeds every month. To manage billions you need a staff, no man can manage such an amount by himself.
When you see it, BET big.
  • #35
  • Jun 11, 2018 12:57am Jun 11, 2018 12:57am
Quoting Rennaissance
That's why the more money you have it becomes harder to make money. Not only do you have to move to higher timeframes but you have to own different assets to make full advantage of your resources.
Spot on. Also banks have that liquidity problem AND no leverage, so the exchange is mainly facilitation. (Being banks they cant use depositors money to trade with) which also has me wondering about hedge funds. I assume all hedge funds are just successful traders looking to get more leverage, so the participants being advanced investors are literally the same as a retail broker offering leverage.

I assume at some point a successful trader may outgrow any form of retail vehicle which means they need to reach out to private investors to get their leverage. And forget about futures, that market's volume is tiny compared to the greater retail market we can participate in through a forex broker.

There are plenty of asset classes, but my simple one trick pony idea only really works with eur usd, so I would need to develop whole new strategies for a new asset class.

But without being able to compound, its gets pretty mundane. Eating the proceeds.
  • #36
  • Jun 11, 2018 3:20am Jun 11, 2018 3:20am
Quoting richyRich27
{quote} Spot on. Also banks have that liquidity problem AND no leverage, so the exchange is mainly facilitation. (Being banks they cant use depositors money to trade with) which also has me wondering about hedge funds. I assume all hedge funds are just successful traders looking to get more leverage, so the participants being advanced investors are literally the same as a retail broker offering leverage. I assume at some point a successful trader may outgrow any form of retail vehicle which means they need to reach out to private investors to get...
Yeah, you completed my quotes. I forgot to even mention the lower the money available for leverage. It's advantageous to develop a strategy that works in any market, if not you will constraint your growth curve alot more. Some people are comfortable making $10000 a month, it depends on the individual. Don't forget that managing a higher amount of money also means taking bigger losses(more pain). Some people might be comfortable risking no more than $1000 per trade. If they go beyond that the emotions kicks in. So such trader will never succeed exceeding his risk limits.

Only a few among successfull traders are able to manage that ever increasing risk. So even among successful traders the success has a large scope. People Don't realize that losses are not felt as a percentage but in nominal terms. Risking $10000 per trade am sorry to tell you that even such a low amount is not given to everybody. Not even to talk about risking $1000000 per trade. The more pain you can take the further you will go in this business.
When you see it, BET big.
  • #37
  • Jun 11, 2018 3:30am Jun 11, 2018 3:30am
Thanks renaissance, bright insights.

My own pet theory about leverage is contrarian. And to me, at least it makes sense.

Leverage is a triple edged sword, not a double edged sword. You can make a lot of money, you can lose a lot of money, but you will make a lot of money again.

The trick is not to play with your leverage. One will inevitably and always raise leverage at the wrong time and reduce it at the wrong time. But if you decide your strategy is reliable, you can choose a high point of leverage and providing your system continues to work, the same leverage that dropped you into the abyss, will certainly lift you up very quickly back to where you were and beyond.

Leverage IS a triple edged sword. Black swan events and owing your broker money, thats another layer of risk. The higher your leverage, in my domain, the less risk is experienced.
  • #38
  • Edited 3:54am Jun 11, 2018 3:38am | Edited 3:54am
But obviously not ridiculous leverage. The recommended 2% of your trading capital=your stoploss...to me is not viable. I use 30% (which to some may seem ridiculous) but it depends. My own strategy does not rely on taking a full stoploss, I know I can get out with a 5 pip loss and 9 out of 10 times Im right...so the 100 pip stoploss although there just for black swan events, is rarely executed.

(I do however take a hit 2 or 3 times per month but the net pips is positive always)
  • #39
  • Jun 11, 2018 4:02am Jun 11, 2018 4:02am
One last thing, leave any broker that consolidates your trade cost into the spread. You can never have accuracy and the spread on eur usd is ZERO most of the time, sometimes even positive, but rarely more than a pip or two in stress. My broker hits me up for .7 of a pip in and out outside the trade and no weird stops being hit because you couldnt visualise the padded spread. The amount of times I have been left in a winning trade with half a pip to spare is crazy, compared to my last broker who always stopped me out because I couldnt visualise the padding on my chart, a world of difference.
  • #40
  • Jun 11, 2018 5:18am Jun 11, 2018 5:18am
Quoting richyRich27
But obviously not ridiculous leverage. The recommended 2% of your trading capital=your stoploss...to me is not viable. I use 30% (which to some may seem ridiculous) but it depends. My own strategy does not rely on taking a full stoploss, I know I can get out with a 5 pip loss and 9 out of 10 times Im right...so the 100 pip stoploss although there just for black swan events, is rarely executed. (I do however take a hit 2 or 3 times per month but the net pips is positive always)
Risk really depends on the strategy, for me I think duration of drawdown is alot more important than size of the drawdown . I will prefer a 50% drawdown that recovers in 2 weeks than a 20% drawdown that recovers in 6. Some strategies have low drawdowns but that last an eternity. Turning in circles for long is sure not my thing.
So when designing my strategies I consider
1. Duration of drawdown
2. Frequency of opportunity
3. Max drawdown
P.s I have discovered that the strategies with low win rate and high risk to reward turn to recover easily from drawdowns than the high win rates strategies. cheers
When you see it, BET big.
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