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What is a 'large' position?

  • #21
  • Dec 4, 2010 10:45am Dec 4, 2010 10:45am
Tomato ... Tomahto! Low volatility ... low liquidity ... low volume ... it all the same. Not enough market players, money, or trades in the market. In either case can be bad for a retail intraday trader. No retail trader can keep up with Quants and HFT trades during low volatile hours. Quants and HFT primarily moves the market.

During low volatility (i.e. low liquidity, low volume) hours, anyone with a little money can move the market. Governments, hedge funds, banks, high worth private traders tend to manipulate the market during these low volatile moments to take advantage of those inefficiencies in the market during the low moments. Market maker brokers enjoy doing the same.
  • #22
  • Dec 4, 2010 11:00am Dec 4, 2010 11:00am
No it's not the same, I think you should look it up. I won't even comment on the rest...
  • #23
  • Dec 4, 2010 12:11pm Dec 4, 2010 12:11pm
Quoting Jhig
Tomato ... Tomahto! Low volatility ... low liquidity ... low volume ... it all the same.
All the same?? Low liquidity and low volatility?
  • #24
  • Dec 4, 2010 12:34pm Dec 4, 2010 12:34pm
... I give up with you people.
  • #25
  • Dec 4, 2010 12:39pm Dec 4, 2010 12:39pm
Quoting Jhig
Tomato ... Tomahto! Low volatility ... low liquidity ... low volume ... it all the same. Not enough market players, money, or trades in the market. In either case can be bad for a retail intraday trader. No retail trader can keep up with Quants and HFT trades during low volatile hours. Quants and HFT primarily moves the market.

During low volatility (i.e. low liquidity, low volume) hours, anyone with a little money can move the market. Governments, hedge funds, banks, high worth private traders tend to manipulate the market during these low...
Tomato potato, not entirely correct. Another word for volatility is standard deviation (risk) which simply means how much "variation" you have from the mean, very shortly described.

Liquidity describes i.e a stock or currencies ability to be traded without any major impact on the price, hence there are plenty of buyers/sellers.
Measure twice, cut once
  • #26
  • Dec 4, 2010 4:40pm Dec 4, 2010 4:40pm
Quoting Jhig
... I give up with you people.
Just confused. I'm more apt to think low liquidity prompts high volatility, like on holidays when the market is too thin to quietly absorb large orders.

Unless I read you wrong. If you meant that all these elements are equal because they all create problems for the intraday trader, then I understand.
  • #27
  • Dec 4, 2010 6:08pm Dec 4, 2010 6:08pm
hi guys just thought id drop my two sense here....

low liquidity does not mean there will be low volatility: When there are no players in the market, smaller size orders will make price move more in order to search for liquidity. This is why you see excessive stop running during low vol hours. However, you could also see low volatility during low volume hours if there are hardly any orders being placed or the volumes on each side are somewhat equally matched.

high volume does not mean there will be high volatility: If there is a lot of money in somewhat equal amounts on both the bid and the ask side, price may not move much with both sides liquidity needs being met However, when there is greatly more money on either side, then moves during high volume hours can become one sided and the market will keep seeking liquidity to fill the needs of that side.

hope this helps
  • #28
  • Dec 4, 2010 6:51pm Dec 4, 2010 6:51pm
lol @ someone who is trading a full million clip, and having to ask these questions...
lowest draw down possible please.
  • #29
  • Edited 8:11pm Dec 4, 2010 7:56pm | Edited 8:11pm
Simply put, high volume does not necessarily mean high volatility, it just makes it more likely.

Volume, volatility and liquidity are related, but not the same thing. Jhig was probably just addressing what they have in common (i.e. relative underlying market activity) when he said "they're the same".

Quoting ehrek
lol @ someone who is trading a full million clip, and having to ask these questions...
There's nothing wrong with asking the kind of questions he asked. What would be wrong is convincing yourself that you know it all just because you're trading that size and/or are fairly successful with your own trading.
  • #30
  • Dec 5, 2010 1:06am Dec 5, 2010 1:06am
Could anyone reply back to my post on the beginning of this page, thank you in advance.
  • #31
  • Dec 5, 2010 8:34am Dec 5, 2010 8:34am
Quoting billflet
I'm more apt to think low liquidity prompts high volatility, like on holidays when the market is too thin to quietly absorb large orders.
...
  • #32
  • Dec 5, 2010 8:34am Dec 5, 2010 8:34am
Quoting fxtrdr78
MT4 with a STP broker would be safe would it not? Thus a true 100% no dealing desk, there would be no reason for them to trade against you since they have already made their money on the spread.

It comes down to trust. Any broker can say this or that. If they freeze your platform, requote you, "trade context is busy", "price is off-quotes", or "excuse of the month error" they are manipulating you plain and simple.

OTC Forex market is not a centralized market in which prices come from. The price comes from your broker. They have the control of what price to give you.

Just because they are regulated means squat. There have been numerous fines recently by NFA/CFTC to supposed "regulated" brokers.

We are talking money here people. Brokers are in business to do what? You don't need a tin-foil hat to figure that out do you?


They should be plenty happy with just the spread? Would you be? If you saw a $100 per pip trade sitting there. See the stop out price and say wow I could take the other side of this trade and make 50*100 plus the spread. Oh but they say they are STP, they could never do that... just like a thief who broke into some house killed and raped they plead "not guilty".

So as I said it comes down to trust... where there's smoke, fire is not to far behind usually.

BTW, this has nothing to do with being paranoid. It has everything to do with being smart and not stupid.
  • #33
  • Dec 5, 2010 8:39am Dec 5, 2010 8:39am
Quoting Marv
Simply put, [b]high volume does not necessarily mean high volatility, it just makes it more likely.
High volume could mean that there are large numbers of both buy and sell orders making up this high volume at the same time. If that's the case then there would be low volatility.

It would only be more likely for high volatility if there was high volume in one particular direction at any given point in time, or at least a higher volume on one side than the low volume on the other side.
  • #34
  • Dec 5, 2010 8:48am Dec 5, 2010 8:48am
Quoting Rex Tradewell
When trading mid day (U.S.) during periods of low volume and low volatility I've heard "experts" say not to trade because the market is too easily and commonly manipulated. Does anyone have experience with this?

I would like to trade up to $100/pip ($100 for each point of market movement) and am wondering if that could possibly create a target in this giant market. If so, would spreading the trade over a few different broker platforms (non-ecn) be a safer way to trade? I've heard this is common for people trading with larger sums. Just not...
When trading 100$/pip (10 lots), you don't have to worry about any "manipulators" will hunt down your stop because you are considered big. 10 lots isn't exactly a new record in volume in this market so I think you have other important issues to worry over when you have found a decent broker.

Considering major pairs only (which have a good liquidity most of the day), you will have the problem you mentioned when contracts start to hit 100-200 million $.
Measure twice, cut once
  • #35
  • Dec 5, 2010 8:49am Dec 5, 2010 8:49am
Quoting fxtrdr78
MT4 with a STP broker would be safe would it not? Thus a true 100% no dealing desk, there would be no reason for them to trade against you since they have already made their money on the spread.
...than other brokers. There is always a reason to trade against you... Higher Profits!

STP is generally better though, as orders are supposedly bypassing the server side processing and entered as soon as you press the send button. The main reason that larger/seasoned traders dislike MT4 is due the possible order interference capabilities of the server side software (e.g. delay order send, ability to see where you are placing stops, artificial spread widening, etc).
  • #36
  • Dec 5, 2010 8:57am Dec 5, 2010 8:57am
For the MT4 discussion:

If you ever have laid your hands on a professional trading-platform in your career, which of course cost money, you will understand why few if any pro uses MT4.
Measure twice, cut once
  • #37
  • Dec 5, 2010 9:33am Dec 5, 2010 9:33am
Quoting Limstylz
High volume could mean that there are large numbers of both buy and sell orders making up this high volume at the same time. If that's the case then there would be low volatility.

It would only be more likely for high volatility if there was high volume in one particular direction at any given point in time, or at least a higher volume on one side than the low volume on the other side.
Higher volatility is the result of higher imbalances between buying volume vs. selling volume.

Such imbalances are more likely to be stronger (thus having a stronger influence on price movement) the more overall volume there is in the market.

Consequently, you will see higher volatility during hours of higher volume, and vice versa. This can be statistically verified.

In other words, buying volume and selling volume have the same probability of (for instance) reaching the point of perfect balance regardless of the overall volume present in the market (and therefore the trading hour), BUT, the severity of the possible imbalances in terms of monetary value won't be the same. Such value WILL depend on the overall volume present in the market (and therefore the trading hour).
  • #38
  • Dec 5, 2010 11:30am Dec 5, 2010 11:30am
Quoting Limstylz
...than other brokers. There is always a reason to trade against you... Higher Profits!

STP is generally better though, as orders are supposedly bypassing the server side processing and entered as soon as you press the send button. The main reason that larger/seasoned traders dislike MT4 is due the possible order interference capabilities of the server side software (e.g. delay order send, ability to see where you are placing stops, artificial spread widening, etc).
Thanks. Was wondering how much of a trade size would it take before you personally affected the markets. 100Mil would do it and generally depends on the volume at the time too assume.
  • #39
  • Dec 5, 2010 12:33pm Dec 5, 2010 12:33pm
Quoting Marv
Higher volatility is the result of higher imbalances between buying volume vs. selling volume.
Agree

Quote
Such imbalances are more likely to be stronger (thus having a stronger influence on price movement) the more overall volume there is in the market.

Not necessarily as there could be low volumes as seen in Christmas period 2008 but very high volatility.

Quote
Consequently, you will see higher volatility during hours of higher volume, and vice versa. This can be statistically verified.

I think this is more due to high volumes traded in one particular direction, albeit over a number of indices/instruments rather than the total volume causing high volatility.

Quote
In other words, buying volume and selling volume have the same probability of (for instance) reaching the point of perfect balance regardless of the overall volume present in the market (and therefore the trading hour),

I'm not sure that I agree that the buying and selling volume have the same probability of reaching the same point of perfect balance... that would mean that the total number of traders and their individual volumes being split equally between buyers and sellers over all markets. I think statistically, that is highly improbable.

Quote
BUT, the severity of the possible imbalances in terms of monetary value won't be the same. Such value WILL depend on the overall volume present in the market (and therefore the trading hour).

Again, I think this is dependant on the volumes at the times that prices are reached and in a specific direction.
  • #40
  • Dec 5, 2010 1:42pm Dec 5, 2010 1:42pm
Agreed - your statement basically sums it up.
Quoting aediaz1
For the MT4 discussion:

If you ever have laid your hands on a professional trading-platform in your career, which of course cost money, you will understand why few if any pro uses MT4.
with the addition of this


Quoting pip seeker
It comes down to trust. Any broker can say this or that. If they freeze your platform, requote you, "trade context is busy", "price is off-quotes", or "excuse of the month error" they are manipulating you plain and simple.
and the fact that MT4 is a program built for use by market makers with dealing desks.
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