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trading with 10 millions VS 1 million ??

  • #1
  • First Post: Dec 15, 2007 11:55am Dec 15, 2007 11:55am
does anyone know if there is difference on forex when you trade news with 10 millions or with 1 million. i mean when u have 100k in account and use 10:1 leverage u operate with 1 million....trades are executed instantly...all OK.

so if you use leverage 100:1 than u operate with 10 million. are the trades executed slower?? or it should be around same speed?
  • #2
  • Dec 15, 2007 12:12pm Dec 15, 2007 12:12pm
Quoting reres
does anyone know if there is difference on forex when you trade news with 10 millions or with 1 million. i mean when u have 100k in account and use 10:1 leverage u operate with 1 million....trades are executed instantly...all OK.

so if you use leverage 100:1 than u operate with 10 million. are the trades executed slower?? or it should be around same speed?
It's just a matter of how many 0's are attached, thus effecting the ammount for each pip. Also, your leverage isn't decided by the brokers leverage remember that, if you're trading 1:100 true though, stop .
  • #3
  • Dec 15, 2007 12:50pm Dec 15, 2007 12:50pm
Quoting reres
so if you use leverage 100:1 than u operate with 10 million. are the trades executed slower?? or it should be around same speed?
the bigger the order, the poorer the execution. the really big players sometimes need a couple weeks to obtain their full position, as they would move the market against themselves if they did it all at once.
Relax and be happy.
  • #4
  • Dec 15, 2007 12:54pm Dec 15, 2007 12:54pm
Quoting merlin
the bigger the order, the poorer the execution. the really big players sometimes need a couple weeks to obtain their full position, as they would move the market against themselves if they did it all at once.
Really? I thought it was instant from retail brokers. That would make sense for interbank though...
  • #5
  • Dec 15, 2007 1:03pm Dec 15, 2007 1:03pm
Quoting reres
so if you use leverage 100:1 than u operate with 10 million. are the trades executed slower?? or it should be around same speed?
On an ECN, same speed, order processed instantaneously. On a dealing desk, who knows.

IB's ECN typically has 10-20 million on the inside spread for the majors, sometimes higher. An order for 200 lots would process immediately without delay or affecting price. There are other ECNs which can accommodate even larger size.
  • #6
  • Dec 15, 2007 1:08pm Dec 15, 2007 1:08pm
Quoting merlin
the bigger the order, the poorer the execution. the really big players sometimes need a couple weeks to obtain their full position, as they would move the market against themselves if they did it all at once.
I was thinking the opposite would happen, why would it move against them?
  • #7
  • Dec 15, 2007 2:45pm Dec 15, 2007 2:45pm
What do you think about TraderKGB's comment that ECNs' performance are not effected by large orders? I would have to disagree with him.

Would you recommend chunking huge orders into tiny ones? I read somewhere that MBTrading recommended this.... it might apply to getting filled faster with others too....

Thanks Merlin.

Quoting merlin
the bigger the order, the poorer the execution. the really big players sometimes need a couple weeks to obtain their full position, as they would move the market against themselves if they did it all at once.
  • #8
  • Dec 15, 2007 4:53pm Dec 15, 2007 4:53pm
Quoting cesare76fx
I was thinking the opposite would happen, why would it move against them?
Because a buyer wants to establish his position at the cheapest possible price, so if he is buying big quickly, he will end up buying his full position at much higher prices rather than accumulating his full position slowly at more attractive prices...So he is moving the market against his intention not against his current position...


Thanks,

Nader
  • #9
  • Dec 15, 2007 5:04pm Dec 15, 2007 5:04pm
Quoting cesare76fx
I was thinking the opposite would happen, why would it move against them?
yeah sorry i wasnt clear on that... narafa already gave the answer above - the buyer of the position wants to obtain the cheapest possible price. when the buyer starts buying, the price will move up, making it more expensive to add to the position. the worst part is, the price is artificially inflated due to the buyer herself. so yes, the movement is in favor of the current position, but the buyer doesnt want that to happen until AFTER the full position on.
Relax and be happy.
  • #10
  • Dec 15, 2007 5:09pm Dec 15, 2007 5:09pm
Quoting tdion
Would you recommend chunking huge orders into tiny ones?
yes, always. even if you are trading with a very small account, its good practice to break your orders down into tiny bits. not only does it spread out the "execution risk" (eg your broker screwing you or a clerical mistake), but it also gives you the best execution.
Relax and be happy.
  • #11
  • Dec 15, 2007 6:19pm Dec 15, 2007 6:19pm
ive done 10 mill order size with interbankfx with instant execution, i did notice sometime my order hung for sereval seconds but it got fill.
If I Go Broke Trying Then I Will die happy.
  • #12
  • Dec 15, 2007 6:22pm Dec 15, 2007 6:22pm
Quoting merlin
yes, always. even if you are trading with a very small account, its good practice to break your orders down into tiny bits. not only does it spread out the "execution risk" (eg your broker screwing you or a clerical mistake), but it also gives you the best execution.
You mean if you want to place a 10 lot order, place five two lot orders or 2 five lot orders...that kind of thing?
  • #13
  • Dec 15, 2007 6:29pm Dec 15, 2007 6:29pm
Quoting merlin
yeah sorry i wasnt clear on that... narafa already gave the answer above - the buyer of the position wants to obtain the cheapest possible price. when the buyer starts buying, the price will move up, making it more expensive to add to the position. the worst part is, the price is artificially inflated due to the buyer herself. so yes, the movement is in favor of the current position, but the buyer doesnt want that to happen until AFTER the full position on.
Thanx Merlin, I've always wondered about this. I understand this is why the COT is not used as an immediate indicator because they move positions in and out over time, i.e, they buy while everyone is selling and vice versa.

What would be considered amounts large enough to do this?

One other thing, how much does it take to move a pair? How is that determined? I've read where half a billion from an M&A or whatever will move a pair a certain percent and then less after that but how does that work? I'm sure it differs at different times of day and such but I've been really, really curious how all that is set up.
  • #14
  • Dec 15, 2007 8:10pm Dec 15, 2007 8:10pm
Quoting inflxshn
Thanx Merlin, I've always wondered about this. I understand this is why the COT is not used as an immediate indicator because they move positions in and out over time, i.e, they buy while everyone is selling and vice versa.

What would be considered amounts large enough to do this?

One other thing, how much does it take to move a pair? How is that determined? I've read where half a billion from an M&A or whatever will move a pair a certain percent and then less after that but how does that work? I'm sure it differs at different times of day and such but I've been really, really curious how all that is set up.
On an exchange, the ask price is coupled with an amount/volume the seller can give you of the currency you are buying. When you fill that amount with your long order, the next best price (always higher) becomes the new ask price, and the bid moves with it. No magic involved, just supply and demand. To see a graphic example, go back to darkstar's well written sticky in the brokers forum.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #15
  • Dec 15, 2007 8:27pm Dec 15, 2007 8:27pm
Quoting Moe
ive done 10 mill order size with interbankfx with instant execution, i did notice sometime my order hung for sereval seconds but it got fill.
10 million USD can be handled by a bucket shop's book keepers. 3 billion can't, I believe. Your retail broker is a virtual exchange, not a real one, in the sense that your orders are simply filled against the broker's orders, not on the market. The broker usually has enough liquidity to do this for these amounts. Your individual activity is invisible to the world, and that is why I love being "small" and dealing with these guys. I do not work for a brokerage and this information should be taken with a grain of sodium chloride.
Virtue finds and chooses the mean. Aristotle, Ethica Nichomachea
  • #16
  • Dec 15, 2007 8:30pm Dec 15, 2007 8:30pm
Quoting Plutonite
10 million USD can be handled by a bucket shop's book keepers. 3 billion can't, I believe. Your retail broker is a virtual exchange, not a real one, in the sense that your orders are simply filled against the broker's orders, not on the market. The broker usually has enough liquidity to do this for these amounts. Your individual activity is invisible to the world, and that is why I love being "small" and dealing with these guys. I do not work for a brokerage and this information should be taken with a grain of sodium chloride.
don't matter as long as i get fill.
If I Go Broke Trying Then I Will die happy.
  • #17
  • Dec 15, 2007 9:04pm Dec 15, 2007 9:04pm
Quoting reres
does anyone know if there is difference on forex when you trade news with 10 millions or with 1 million. i mean when u have 100k in account and use 10:1 leverage u operate with 1 million....trades are executed instantly...all OK.

so if you use leverage 100:1 than u operate with 10 million. are the trades executed slower?? or it should be around same speed?
The fill you get comes down to the following factors:

1. The currency pair that you are trading (If you are trading EUR/USD you are going to be more likely to get 1 M off as quickly as you are 10 M than if you are trading USD/CAD for example)

2. The liquidity in that pair in the interbank market at the time you place the trade ( This is going to depend on number 1 plus how big the news event that you are trading is and how close to expectations the news comes in. The bigger the news event and the further away from expectations that the news comes in the less likely you will be able to get 1 M off as easily as 10 M)

3. The access the broker that you are trading with has to the available liquidity in the interbank market and/or their willingness to take and hold the opposite side of the trade if they are a market maker. (In general the bigger the broker the better access that they are going to have to the liquidity available in the interbank market)

Hope that helps.

FXTrader1979
  • #18
  • Dec 16, 2007 7:21am Dec 16, 2007 7:21am
Quoting merlin
yeah sorry i wasnt clear on that... narafa already gave the answer above - the buyer of the position wants to obtain the cheapest possible price. when the buyer starts buying, the price will move up, making it more expensive to add to the position. the worst part is, the price is artificially inflated due to the buyer herself. so yes, the movement is in favor of the current position, but the buyer doesnt want that to happen until AFTER the full position on.
Quoting narafa
Because a buyer wants to establish his position at the cheapest possible price, so if he is buying big quickly, he will end up buying his full position at much higher prices rather than accumulating his full position slowly at more attractive prices...So he is moving the market against his intention not against his current position...


Thanks,

Nader
Quoting Plutonite
10 million USD can be handled by a bucket shop's book keepers. 3 billion can't, I believe. Your retail broker is a virtual exchange, not a real one, in the sense that your orders are simply filled against the broker's orders, not on the market. The broker usually has enough liquidity to do this for these amounts. Your individual activity is invisible to the world, and that is why I love being "small" and dealing with these guys. I do not work for a brokerage and this information should be taken with a grain of sodium chloride.

Thank you all
  • #19
  • Dec 16, 2007 12:32pm Dec 16, 2007 12:32pm
Quoting renegade7
You mean if you want to place a 10 lot order, place five two lot orders or 2 five lot orders...that kind of thing?
yep! but on a 10-lot order, i would probably break it down into 10 1-lot orders. not that a 10-lot order would get a bad fill or move the market (1mil order is considered fairly small), its just good practice to spread out the execution risk.
Relax and be happy.
  • #20
  • Dec 16, 2007 3:13pm Dec 16, 2007 3:13pm
Quoting reres
does anyone know if there is difference on forex when you trade news with 10 millions or with 1 million. i mean when u have 100k in account and use 10:1 leverage u operate with 1 million....trades are executed instantly...all OK.

so if you use leverage 100:1 than u operate with 10 million. are the trades executed slower?? or it should be around same speed?

Hey,

My broker, Oanda, offers garanteed fill up to 20M, or maybe 10M, can't remember. I'm sure most market makers offer the same type of liquidity so I would assume that even the 100M would be instantly executable if you hit 10 different brokers. If they garantee, as they say they do, then it will be up to the house to find the liquidity.

Not sure about this though, what if someone hit every market maker for maximum allowed lots - if the liquidity is not in there then someone has to provide it, the house in this case. But Oanda also claim that they hedge every position, so how can this be? How can they claim to always hedge and always fill, surely sometimes both are not possible.
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