How liquid is forex during volatile news release periods? | Forex Factory

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How liquid is forex during volatile news release periods?

  • #1
  • First Post: Jun 2, 2014 10:52am Jun 2, 2014 10:52am
Hi guys,
My friend is using a strategy consisting of trading only during extreme volatile situations, such as NFP. Right now, he has a couple grands and this strategy works perfectly.

However, as his trading capital increases, he also wonders if him alone could really see the situation where his broker starts to lack liquidity for his order during this kind of situation.

My point is: Although volatile news releases could see a lack of liquidity, but since this is the most liquid market in the world, the liquidity could still be pretty decent for one single retail trader.

Although there is no true answer to this question, can you give me a very approximative trading size beginning to which we need to mind the possible lack of liquidity in volatile news realeases?

ex: number of lots traded in these situatinos?
Again, no good answer exists in this kind of situation. Any kind of help is welcomed.

Thanks!

Wllen1
  • #2
  • Jun 2, 2014 11:06am Jun 2, 2014 11:06am
Quoting wllen1
Hi guys, My friend is using a strategy consisting of trading only during extreme volatile situations, such as NFP. Right now, he has a couple grands and this strategy works perfectly. However, as his trading capital increases, he also wonders if him alone could really see the situation where his broker starts to lack liquidity for his order during this kind of situation. My point is: Although volatile news releases could see a lack of liquidity, but since this is the most liquid market in the world, the liquidity could still be pretty decent for...
Liquidity isn't that high right now, it's US lunchtime, London has closed, and I could easily trade 10m+ ($1000+ per pip) in EURUSD either side of the market for less than a pip total spread. Your friend bigger than that? If you're willing to pay a bigger spread you can get much higher size.

NFP times it's pretty tricky to estimate. I can't tell you off the top of my head without watching the next one. Liquidity dries up then explodes.
  • #3
  • Jun 2, 2014 3:28pm Jun 2, 2014 3:28pm
"However, as his trading capital increases, he also wonders "

who is "he"


Quoting wllen1
Hi guys, My friend is using a strategy consisting of trading only during extreme volatile situations, such as NFP. Right now, he has a couple grands and this strategy works perfectly. However, as his trading capital increases, he also wonders if him alone could really see the situation where his broker starts to lack liquidity for his order during this kind of situation. My point is: Although volatile news releases could see a lack of liquidity, but since this is the most liquid market in the world, the liquidity could still be pretty decent for...
My Best Trade is Next Trade!
  • #4
  • Jun 2, 2014 11:53pm Jun 2, 2014 11:53pm
Still very liquid, but depends on if you are high a frequency trader or a conventional trader.
  • #5
  • Last Post: Jun 3, 2014 7:44am Jun 3, 2014 7:44am
Quoting IkerParks
Still very liquid, but depends on if you are high a frequency trader or a conventional trader.
Well, I'm a conventional trader.

Btw, I asked my broker, and he gave me the approx. volume of 100 lots when news trading.
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