QuoteDislikedYou mention Level II order books. These relate to stock trading.
I'm thinking that speculators also speculate/track the deals which take place between two large companies which have deals in 100s of millions. So, if this activity, the exchange of currency, can be spotted because there are only some 12 banks (my guess) worldwide which deal such large amounts and the traders responsible for handling such an exchange of currency will be more or less the same. Also, these banks might not get the full order filled in an hour or so they will have to wait for the market to retrace and this will be an opportunity.
If it is 50-50 between banks and speculators then from what I have read here is taking the side of banks is profitable because they are almost never wrong.
^^please comment on this.
Banks have their own inter bank exchange system. Is it their duty to act as liquidity? My understanding is that only MMs are given the responsibility to monitor the markets and maintain the liquidity.
QuoteDislikedIn any case all MM's, whether large or small are in business to make money. They do this by buying at a lower price than which they sell which of course is commonly know as the spread. They also “encourage” anyone to sell at a lower price than which they bought and vice versa. A practice commonly referred to as price manipulation. MM's also need to be competitive. If they get too greedy, both speculators and non speculators will take their business elsewhere.
QuoteDislikedThe traps are set for much bigger prey
Do banks change their rates intraday?
A trade should be based on an assumption based on facts
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