how big do i have to trade to move the market? | Forex Factory

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how big do i have to trade to move the market?

  • #1
  • First Post: Mar 29, 2008 2:26am Mar 29, 2008 2:26am
hoping someone with access to a larger account than mine could answer this question. i'm sure it varies by the pair but can anyone give numbers on trades they made which moved the markets? and by how much? this is assuming a market order, i know market effect can be...adjusted by using limit orders, timing, etc. just want to get a general idea
  • #2
  • Mar 29, 2008 3:00am Mar 29, 2008 3:00am
Have a look at how much cash the Federal Reserve has put in the market over the past year.

Then have a look at EUR/USD and see how much the market moved in the Federal Reserves favour.
Not all sins are created equal
  • #3
  • Edited 3:25am Mar 29, 2008 3:24am | Edited 3:25am
Quoting Jay Walker
Have a look at how much cash the Federal Reserve has put in the market over the past year.

Then have a look at EUR/USD and see how much the market moved in the Federal Reserves favour.
i'm not sure if you're serious or not but if you are i dont understand how thats a fair measure of what i'm asking. could you explain farther?

edit: i'm asking more on the basis of liquidity, not fair market value of a currency. how much slippage per $100,000,000 etc
  • #4
  • Mar 29, 2008 6:22am Mar 29, 2008 6:22am
This question can't be answer correctly, think about it the market could be moved without knowing its even your trade, sure on a down day a large sell will move the market, but how do you know 5 other large orders weren't just placed simultaneously?

How do you know that large orders wont be triggered when prices are hit as the 1million order goes through?

How long is piece of string?

It changes for each and every trade determined by market conditions.
  • #5
  • Mar 29, 2008 6:30am Mar 29, 2008 6:30am
I would think 500 million or above unless you trade when the market volume is very low...even then I would think computer trading systems would kick in and negate your activity.
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  • #6
  • Mar 29, 2008 6:41am Mar 29, 2008 6:41am
Quote
Then have a look at EUR/USD and see how much the market moved in the Federal Reserves favour.

Wouldn't it move against the federal reserve? By dumping cash into the market they're increasing the monetary supply and effectively inflating things... aren't they? Wouldn't that decrease the value of the dollar and increase the EURUSD?

Problem is, of course, that it's doing this in response to an economic problem. So it's seen more as a positive (at least by a lot of people) and that tends to balance out the effects... or so it seems.

Anyway I think you'd need several billion to move the market, or at least access to 10b over a short duration. I don't know if you could calculate slippage like that since it would depend on a whole heck of a lot of things... but if you weren't careful you'd end up driving the price against yourself. But ya I suspect that if you were looking to scalp with billions of dollars you could probably do it on the slower periods. Just a guess tho. Needless to say it's a lot.
  • #7
  • Mar 29, 2008 6:53am Mar 29, 2008 6:53am
Quoting JDelphiki
i'm not sure if you're serious or not but if you are i dont understand how thats a fair measure of what i'm asking. could you explain farther?

edit: i'm asking more on the basis of liquidity, not fair market value of a currency. how much slippage per $100,000,000 etc
I think the answer of Jay Walker is fair. There is a difference between the interbank market and retail shop (bucketshop) despite what is possible today via electronic technology - ECN. Only central banks and interbank can move the market. The concept has not change you cannot move the market, since you cannot trade directly in that market.

You can only bet or speculate with your broker of possible outcomes of the actions of interbank traders.

Given you have $100,000,000 to go in right now, it can only move the market if your broker made that available to the interbank market, immediately. I maybe wrong, but I think orders are cleared at future dates
and not immediately.

What are the odds against betting with your broker with that huge amount? Will they submit your order or not? No body want to lose. Many do not even have that sum of money in the first place to hedge against your own wins.
  • #8
  • Mar 29, 2008 6:53am Mar 29, 2008 6:53am
Quoting JDelphiki
hoping someone with access to a larger account than mine could answer this question. i'm sure it varies by the pair but can anyone give numbers on trades they made which moved the markets? and by how much? this is assuming a market order, i know market effect can be...adjusted by using limit orders, timing, etc. just want to get a general idea
It depends on 2 factors, the average turnover of the pair you are talking about and the time your order hits the market.For your order to move the market in a pair which averages a daily turnover of $5 Bln (Dollar related pair of course), and during a time where 70% of the turnover takes place, anything of 5% of the turnover and above will be significant, which means around $250 m. If your order is hitting the market during the other period where the remaining 30% of the turnover takes place, you can move the market with 1-2% of the average daily turnover, that is 50-100 m.An example which resembles this I face sometimes is stocks. Sometimes when the average daily volume of a certain stock is around 100K and I am buying 25,000 shares of that stock, I move the market substantially, but after all, if the stock isn't worth it, it will return back to the same point once my order gets filled.Thanks,Nader.
  • #9
  • Mar 30, 2008 3:18am Mar 30, 2008 3:18am
just my HO, i think a guy here named SOULTRADER

is the right one to answer this question
  • #10
  • Mar 30, 2008 4:24am Mar 30, 2008 4:24am
Jesus... Who cares ?! If you have anough to move the market you should be getting a tan on some exotic beach instead of trading it...
On the path to Enrichment.
  • #11
  • Mar 30, 2008 5:24am Mar 30, 2008 5:24am
jurassic, it is quite important to know how large would an order needs to be made in order to move the market

what i believe is our orders are very small compared to the big boys
so small that if we are all in forex factory were to implement the same trading strategy we would still lose

thus, in order to win this game we need to think like the bigboys

do not think and play like average traders

thus becomes a trend follower is the best approach of this knowledge
  • #12
  • Apr 16, 2008 10:30am Apr 16, 2008 10:30am
I would dare say that the only trades that are going to move the markets are going to come from banks. We are a flea on a dogs back along for the ride. We are looking at accounts that have the ability to have millions tied up at once and not even dent the margin levels of the account being traded from.
  • #13
  • Apr 16, 2008 10:41am Apr 16, 2008 10:41am
You know what they say... If you have to ask, you can't afford it .
  • #14
  • Apr 16, 2008 10:45am Apr 16, 2008 10:45am
Quoting JDelphiki
hoping someone with access to a larger account than mine could answer this question. i'm sure it varies by the pair but can anyone give numbers on trades they made which moved the markets? and by how much? this is assuming a market order, i know market effect can be...adjusted by using limit orders, timing, etc. just want to get a general idea
Ask Bravado
Patience + Humility + Study = Success
  • #15
  • Apr 16, 2008 11:30am Apr 16, 2008 11:30am
depends on the time of day, the currency pair and the market depth. - how long is a piece of string?

ive seen as little as 15mio move the market 5 pips and then ive seen 300mio swallowed up in a heartbeat without a single pip moving.

Hope this helps
https://linktr.ee/Soultrader
  • #16
  • Last Post: Apr 16, 2008 11:39am Apr 16, 2008 11:39am
It is completely not an important question. Do you guys remember when the BOJ were dropping bombs on the market in the early evening back in 2003-04. That was what it took to move the market from a standstill...
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