why do spreads change second by second?

Hi,

I have been reading about the relationships between the brokers and dealers in the interbank market with regard to the spread but to be honest they are written as 'university papers' and as such are too difficult for me to get a grasp of really. It seems that there is 'information' in the spread because if there wasn't the spread would remain constant indefinitely?
and can this be used to determine short term direction?

So I was wondering if anyone could simplify what happens between these players in terms of a large trade needing to be placed and how this will effect the spread.

Imagine a day where there are no big announcements so spread should remain within a tight range as there are lots of traders willing to exchange, then why for example does the spread on gpb/yen move between 0 and 5 for example?

Also, a big institution wants to liquidate a large profitable trade and then wants to go short at resistance ie 150, since it is mainly retailers who buy at resistance how is this large order dispersed into the market at the price that the big institution wants ie 150?

Any input appreciated

Cheers J

Most everything you need to know is in this thread by Darkstar

http://www.forexfactory.com/showthread.php?t=7484

and there's some discussion about order flows in this thread

http://www.forexfactory.com/showthread.php?t=193795

thanks for the reply, I am already actively participating in the order flow thread. It's quite funny really as the thread starter has said 'his work is done' after showing very few examples and then those that are saying they get 'it' aren't backing it up with chart examples..hhhmmmm!

Anyway still learning and I have already read Darkstars post, which I read when I first found ForexFactory. But still, it doesn't answer why the spread moves the way it does.

I think in order to trade properly you need to know who is creating the price and why spread varies in active and quiet periods.

I will keep searching for answers

Thanks J