Will $1 billion units per trade move EUR/USD?

If so, how much will it move? Any experienced trader or trade who have seen people enter such amount pls comment...

also, what will the estimated slippage be like?

you dont move 1 yard in one trade, the trade is split up. If you tried to move that much, you would push the price higher as you bought.

I think the price would actually fall with big trades like that, For someone to sell you a yard the want better than market price and would offer it out at 5-10 pips below market price.

Common misconception but that's how it works.

Yes you wouldn't put through an order that size with one click. The trade would be executed in parts until the full position was on.

I used to wonder about this topic myself. If putting a large order through can move the market in the direction of your trade then you make profit without any effort, right? But it isn't as simple as that.

I read about a very successful trader who grew his account to the point where his trades started to move the market against him. He had to rethink his whole trading method to carry on trading at that lot size.

I would say that it depends on how much open interest there is at that point. In an illiquid market, your order(s) will move the market more than in a liquid market. You can get partial fills up until there are no more limit orders left within your desired price range (remember market orders "soak up" liquidity).

For example, say you are willing to buy EUR/USD at any price below 1.2500 and current price is 1.2490. Let's also say that there is a 100 million sell limit at 1.2490 which is being filled. You may get a part of that, at which point there are no more sellers at 1.2490 and price moves up to where there are sellers, say 1.2491 where there is another 50 million up for grabs. You can again get a partial fill until there are no more sellers, and so on until your order is completed. As long as there are enough sellers that you can deal with below 1.2500, you should be fine.

I think watching the market depth on several ECNs for a few days/weeks will give you some idea of how likely you are to get filled at different times of day without moving the market too much.

Unfortunately, I don't have the luxury of trading billions so I don't guarantee the accuracy of the information provided, but this is how I see it in theory.

According to Oanda, a $1b order will move EUR/USD around 130 pips in liquid hours or 260 pips in less liquid ones.

http://dl.dropbox.com/u/190212/ff/oanda_impact_1.png

http://dl.dropbox.com/u/190212/ff/oanda_impact_2.png

http://dl.dropbox.com/u/190212/ff/oanda_impact_3.png

Adal, what you quoted sounds like bullshit! According to this info only 200 mio will move EURUSD at current exchange rate by 280 pips, that is, you need only 5 mio on your account to make such a huge movement, thats rediculous bullshit! There are a lot of people with even bigger accounts, if what is stated were true there would be wild swings all the time! Biggest fx brokers has market depth, you can buy at a click 200 mio eurusd and it will move the currency 1-2 pips at biggest!

I just came across an article which states that EURRUB was moved 40 dollar-value-pips with 1 billion $, so you might come to conclusion that 1 billion $ will not do much with EURUSD, I would say it will move currency max by 3-5 pips!

Oanda's explanation sounds like a justification for their stop hunting practices

It's true.
Retail FX is very very small and subject to huge manipulation.

i heard a few yrs ago it was around 1bill to move the Euro 1pip
but could also be wrong though and volumes have decreased a bit since then
all i know is it is nt me moving the market, and its all rigged anyway

the very biggest traders / Market Makers (even bigger than the normal banks we always hear about)
trade all the currencies between themselves and never loose as they pass the orders back and forth between each other, a bit like two opposing football teams, but these are both playing for the same side!

if they're ever caught out by the other small investment banks, price is just taken back to the level of a bad order by the other team and then the loosing trade is filled at a better price - these are the true market makers
(huge banks hidden under the normal radar)
a bit hard to explain, but read it in a brilliant article a few yrs ago which has unfortunately since been mysteriously removed from the net
so does n't really matter how much it takes to move the market - we are always on the wrong side

$1.3900 = 13900 $pips
0.2% = 0.002
13900 * 0.002 = 27.8 pips
Quite realistic in fact.

Manipulation is required to fill such large orders (large orders being relative to actual volume per day in the given market).

To fill such order would require making the market look weaker than it actually is in order to feed of the market orders. Spoofing as such and playing both sides of the order book.

Nah, dont listen im talking crap.

You're forgetting that (a) the market is not bid/offered a uniform amount throughout the prices; (b) no one needs to stand around and let their orders get filled at shit prices when some massive order is sweeping up everything in its path - orders get pulled; (c) the amount that may be posted at the current best bid/offer is not going to be the same amount that's posted at prices 10+ pips in either direction; (d) the amounts that are posted at bid/offer are meaningless unless that sort of size actually trades (ever seen a large order show on the bid and price goes through with only a fraction of the size that was posted having traded?); (e) an order that fills bids or offers and continues moving the market against those orders will result in more orders in the same direction, from those who got filled and are underwater and looking to get out.

To me it seems ludicrous to suggest that a billion dollars/whatever will only move the market by a few pips under general circumstances. But who knows, and who really cares - you can't trade order flow (by which I mean "real" order flow) in fx, so what does it matter...

In my opinion if you do this via retail broker then it may not move , but if you do using bank and utilize interbank market then it has more probability to make price movement.

Sure it will move it.......

how ow much depends on how many other bids/offers are in proximity at the time

by the same fact, one million could move it more or less

How about when you enter the trade as a limit order rather than as a market order.

Some of the replies seem to imply that moving the price with large market orders is a bad thing (you get "slippage"?!); for frag's sake! That's the core of trading!

If you are that big it becomes easier to make money. With billions you can absorb all the pressure in one direction and reverse a swing.
Sell one billion as price moves up until you stop the progression, then market sell another billion pushing price lower and close your position as underwater overleveraged retails get stopped out. They do this at appropriate time in relation to some chart pattern or RSI divergence or trendline or whatever crap popular TA signal.

This is trading; you actively bounce price the way it suits you, at the appropriate time.

Check out this chart EURUSD 15min from December 4. Up break out of up tilted wedge in a strong up trend; the most bullish sign you can imagine. Everybody and their moms are going long here, and yet somebody is selling into huge buying pressure... Who do you think won? Open your charts and check out the ensuing action; price made a new high taking out some retail short stops and then dropped in the following hours and days.

*Even as I posted that chart live, I knew it was not going to rise anywhere near "100-200 PiPs" before a major down move. It turned out it was only a few PiPs.

Trading isn't passively predicting price. It is actively manipulating it.

PS I don't know how much money it took to do that. I guess hundreds of millions to a billion of limit and market orders to arrest the up trend and negate the break-out, over a few hours. Certainly less than that, in aggressive market orders to thrust it down starting the down move after taking out the short stops with the new high.
I guess one or very few participants start the play and others join in as it becomes more obvious that they have the strength to prevail.