When does a trader outgrow their trade size? | Forex Factory

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When does a trader outgrow their trade size?

  • #1
  • First Post: Jul 19, 2010 12:19am Jul 19, 2010 12:19am
Not in this position unfortunately just putting it out there

We know that for eg big banks that want to open a large position need to do so in stages so as not to put the market against their own position

My question is:

How big would ones trade size need to be before having to strategically fill their orders (bits at a time) I know this would depend on the market and liquidity at the time etc etc But when does a small trader get too big i guess is what I'm saying, where he/she can't just chuck it all on the price they want. Know what I mean?
Time hides Nothing
  • #2
  • Jul 19, 2010 12:41am Jul 19, 2010 12:41am
Quoting CindyXXXX
Not in this position unfortunately just putting it out there

We know that for eg big banks that want to open a large position need to do so in stages so as not to put the market against their own position

My question is:

How big would ones trade size need to be before having to strategically fill their orders (bits at a time) I know this would depend on the market and liquidity at the time etc etc But when does a small trader get too big i guess is what I'm saying, where he/she can't just chuck it all on the price they want. Know what I mean?...

Using IBFX as my broker, I am limited to 50 lots on a single trade. I'm guessing by the time I'm trading 50 lots at 100:1 leverage I STILL wont have any impact on the market as a whole.

I suppose I "could" open multiple 50 lot trades, but why would I at $500 a pip? I mean, right now I happy to be making 50 pips a week, at $500 a pip thats $25k a week. I'm not that greedy.
  • #3
  • Jul 19, 2010 4:05am Jul 19, 2010 4:05am
Quoting Zurathustra
Using IBFX as my broker, I am limited to 50 lots on a single trade. I'm guessing by the time I'm trading 50 lots at 100:1 leverage I STILL wont have any impact on the market as a whole.

I suppose I "could" open multiple 50 lot trades, but why would I at $500 a pip? I mean, right now I happy to be making 50 pips a week, at $500 a pip thats $25k a week. I'm not that greedy.

Don't discount the fact our perspective will bend and wrap in direct proportion to the amount of $ we make.
  • #4
  • Jul 19, 2010 10:00am Jul 19, 2010 10:00am
Quoting Zurathustra
I suppose I "could" open multiple 50 lot trades, but why would I at $500 a pip? I mean, right now I happy to be making 50 pips a week, at $500 a pip thats $25k a week. I'm not that greedy.
Because you can? My question to you is why would you limit yourself? As your capital grows, your returns will shink until you find it no longer worthwhile to trade, and possibly losing to inflation. All because you decided you didn't want to be greedy. Anyway, what is greed? It's a human construct that seems to serve the purpose of cutting down our tall poppies (or just redistributing wealth to other tall poppies). You don't see rabits stop breeding because their numbers are swelling. In fact, I'd call the dislike of "greed" as an insult to nature.
  • #5
  • Jul 19, 2010 11:25am Jul 19, 2010 11:25am
Quoting CindyXXXX
Not in this position unfortunately just putting it out there

We know that for eg big banks that want to open a large position need to do so in stages so as not to put the market against their own position

My question is:

How big would ones trade size need to be before having to strategically fill their orders (bits at a time) I know this would depend on the market and liquidity at the time etc etc But when does a small trader get too big i guess is what I'm saying, where he/she can't just chuck it all on the price they want. Know what...

Hi,

Central banks can spend billions in few minutes to move market. But if you put that money slowly it won't move the market that much.

I think the size depend on time frame & market direction. So if big banks build a position for some billions over a month. It won't move the market same way if they enter at one shot.

Don't think any retail will be able to move the market. Also remember SNB they lost over 10 billion USD when they moved against the market. The market first popup then market forces worked again lower & SNB had to knowledge the loss.

Regards
13
Brokers are angels
  • #6
  • Jul 19, 2010 2:38pm Jul 19, 2010 2:38pm
trade size should never exceed your comfort zone.. you should take on more markets and increase exposure through diversification as money grows.
  • #7
  • Jul 19, 2010 5:43pm Jul 19, 2010 5:43pm
Quoting Mr J
Because you can? My question to you is why would you limit yourself? As your capital grows, your returns will shink until you find it no longer worthwhile to trade, and possibly losing to inflation. All because you decided you didn't want to be greedy. Anyway, what is greed? It's a human construct that seems to serve the purpose of cutting down our tall poppies (or just redistributing wealth to other tall poppies). You don't see rabits stop breeding because their numbers are swelling. In fact, I'd call the dislike of "greed" as an insult to nature....
I couldn't agree more as the problem with retail traders are their not Greedy enough in this game. The word "greed" used in trading = arbitrary limitation placed on a trader's Psyche. It's the same wording used when someone says "overtrading". There's no such thing as overtrading as it can't be defined. Traders look to rationalize every aspect of their craft will find themselves coming up short everytime. Retail traders need to take a few lessons from Institutional traders by getting in on high probable trade setups with no doubt in mind as in trading we should already know the risk involved.

Reminds me of traders who says, "he's looking to earn 50 pips a day" without taking into consideration the many variables in the market. It doesn't work that way. Some days are good trading setup days while others are not. For example, I knew during the London session the market would sideways, so I stayed out. Sure enough, the market sideways! Even though the market sideways I still actively searched out trade setups throughout the day.

If an opportunity presents itself, you take it, run your orders hot. I see perfect setups and I run 5,000,000+ contract to ensure I make money off the trade. Run my stops wide just in case I'm wrong. End of the day, I'm glad I took the risk if it plays out as expected. If I'm wrong I don't look to cut the entire trade and bail, which is wrong and I see so many trader doing it. Instead I look for areas to unload some of my losing position or if the market happens to finally move in my direction I'll add to my position if its in the negative allowing my negative to break even faster. Some would say that I'm letting my losers run but if traders understand the risk will know price seems to always retrace back to or near it's originally level. Allowing me to close out at a smaller lose, better price, BE, or order move into the green - depending on how you played the risk. I am a little biased as I do own a trading firm and one rule of thumb is not to close out positions in their entirety, as thats just bad money management. Its also what big firms and banks do.
  • #8
  • Jul 19, 2010 9:26pm Jul 19, 2010 9:26pm
Quoting CindyXXXX
Not in this position unfortunately just putting it out there

We know that for eg big banks that want to open a large position need to do so in stages so as not to put the market against their own position

My question is:

How big would ones trade size need to be before having to strategically fill their orders (bits at a time) I know this would depend on the market and liquidity at the time etc etc But when does a small trader get too big i guess is what I'm saying, where he/she can't just chuck it all on the price they want. Know what...

Good question.

You'll know when you begin to experience (the joy of) partial fills.

Meaning, when you want to trade n contracts/lots/shares at a given price and only a portion of your order is filled at that price with the remainder of your order pending. Sometimes as the market leaves without you. Sometimes never to be filled (time to call the broker) or filled at an unfavorable price.

Similar to slippage but typically with market slippage your entire order is filled, it's just not filled at the exact price you expected.

Needless to say partial fills _really_suck_ when you're trying to get out.
"The markets are the greatest chess match ever played."
  • #9
  • Last Post: Aug 2, 2010 5:35am Aug 2, 2010 5:35am
Quoting CindyXXXX

My question is:

How big would ones trade size need to be before having to strategically fill their orders (bits at a time) I know this would depend on the market and liquidity at the time etc etc But when does a small trader get too big i guess is what I'm saying, where he/she can't just chuck it all on the price they want. Know what I mean?
Depends on currency pair traded. For the majors definitely when your trade size is in the 100s of $M, which means a margin account that's in the millions.
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