How many lots makes a difference? | Forex Factory

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How many lots makes a difference?

  • #1
  • First Post: Jul 31, 2006 1:34pm Jul 31, 2006 1:34pm
Out of curiosity how many lots does one have to put on a trade for the market to take notice? say the GBP/USD , 100 lots? 1000 lots?
  • #2
  • Jul 31, 2006 2:48pm Jul 31, 2006 2:48pm
This is an interesting question. I'd be more worried about how many lots I'd have to put down before my broker or market maker take notice, though. I guess that's the cynic in me.
  • #3
  • Jan 20, 2007 8:21am Jan 20, 2007 8:21am
May be the best way to know would be to try?
But the question would be then do you have enough funds to do so
  • #4
  • Jan 20, 2007 10:17am Jan 20, 2007 10:17am
I think its more like 1000000 lots forex is powerful and it takes incredible amounts of money to make it move even a few pips, banks and large organisations with billions at their disposal barley get it to shift.

The large organisations know the only way to make a difference is to get all the average Joe traders all the sheep and all the top dogs to agree that a trade will go one way, if they can get that then the forex may move in the favoured direction.
  • #5
  • Jan 20, 2007 10:56am Jan 20, 2007 10:56am
Quoting stockwet
This is an interesting question. I'd be more worried about how many lots I'd have to put down before my broker or market maker take notice, though. I guess that's the cynic in me.
Rofl...but very true.
  • #6
  • Edited 4:10pm Jan 20, 2007 11:22am | Edited 4:10pm
It would also depend on the time of day and the day it self. If liquidity is light, due to say a holiday, it would take much less.

This is often why the market does these wierd moves during or just immediately after a holiday. Often these types of moves are engineered and can be carried out, because activity is so light. If you are the only one bidding or offering, your price will be the price... (in simplistic terms of course).
  • #7
  • Jan 20, 2007 5:44pm Jan 20, 2007 5:44pm
Most probably it will need you around $1B to make a difference...$1,000,000,000 is 10,000 standard lots...If you use 100:1 leverage (I doubt anybody in the universe will allow you to have 100:1 leverage if you trade above $10M not $1B), it means that you need $1,000 for every standard lot to only cover up the margin...This means that to cover up the margin of such a trade your account must be at least $10M...Of course you shall start the trade with a 2 or 3 pips loss which is around $20 or $30 per lot or $200,000 or $300,000.....

Now the good news is that such a trade will only make a difference & affects the price of the pair you are trading for a couple of seconds or at most a couple of minutes...


Thanks,

Nader
  • #8
  • Jan 22, 2007 1:32am Jan 22, 2007 1:32am
Hasn't anyone here read "The New Market Wizards"? I don't have the book in front of me but several people there talk about moving the forex market with their orders. One of them even says that it shifts the market sentiment for days afterwards. Granted this is back in the 90's when forex wasn't as popular with the retail crowd, but the banks and multinational corporations where still players..... they market's not that much smaller.
  • #9
  • Jan 22, 2007 12:47pm Jan 22, 2007 12:47pm
I asked this in another thread but I don't believe anyone ever responded to it. Isn't it impossible for a retail trader to move the market, since all of his or her orders are hedged, thus their impact on the market is neutral?
  • #10
  • Edited 9:57am Apr 19, 2007 9:32am | Edited 9:57am
Quoting mickeymickey
I asked this in another thread but I don't believe anyone ever responded to it. Isn't it impossible for a retail trader to move the market, since all of his or her orders are hedged, thus their impact on the market is neutral?
Good answer mickey.

What is more relevant to an individual trader is how many lots would it take to raise a flag with his or her broker ?????
  • #11
  • Jul 2, 2011 10:25am Jul 2, 2011 10:25am
You can move market around 3 - 5 pips with 200 millions (2000 lots) market order
  • #12
  • Jul 2, 2011 10:57am Jul 2, 2011 10:57am
Quoting threeticks
Good answer mickey.

What is more relevant to an individual trader is how many lots would it take to raise a flag with his or her broker ?????
What will/can the broker do if someone opens a huge position? If someone has a large enough account, will the broker still mind?
  • #13
  • Jul 2, 2011 11:37am Jul 2, 2011 11:37am
Quoting misterboy
What will/can the broker do if someone opens a huge position? If someone has a large enough account, will the broker still mind?
bigger position == more money for broker from fees (ECN) or spread, so they love it .. Lot of mainly brokers can provide up to 20 M $ (200 lots) liquidity for price, which you see. If you would like to buy/sell more, you can use pending order. (for big positions its much more cheaper)
  • #14
  • Jul 2, 2011 11:51am Jul 2, 2011 11:51am
a 17Billion lot trade error by a company EA caused a flash crash not to long ago. it was supposed to be 17million. somone reading this google it im to lazy but that kind of gives you an idea, dont remember which pair it was.
  • #15
  • Jul 2, 2011 9:37pm Jul 2, 2011 9:37pm
Quoting Dark1
Out of curiosity how many lots does one have to put on a trade for the market to take notice? say the GBP/USD , 100 lots? 1000 lots?
How many lots is variable.. if everyone in market stopped trading except me and you.. then me and you could move the market with micro lots an infinite amount of pips


this is why less liquid markets are often more volatile with large price swings.. take news releases for example..
  • #16
  • Jul 3, 2011 3:13pm Jul 3, 2011 3:13pm
Quoting newyear498
How many lots is variable.. if everyone in market stopped trading except me and you.. then me and you could move the market with micro lots an infinite amount of pips


this is why less liquid markets are often more volatile with large price swings.. take news releases for example..
Or you will not move, when you will buy 1 lot and newyear sell 1 lot at the same time
  • #17
  • Jul 3, 2011 3:38pm Jul 3, 2011 3:38pm
Quoting PTscalper
Or you will not move, when you will buy 1 lot and newyear sell 1 lot at the same time
  • #18
  • Jul 3, 2011 4:00pm Jul 3, 2011 4:00pm
Quoting perfectgrim
a 17Billion lot trade error by a company EA caused a flash crash not to long ago. it was supposed to be 17million. somone reading this google it im to lazy but that kind of gives you an idea, dont remember which pair it was.
May 6 2010, and it was ES (e-Mini S&P 500 Futures). The inconclusive theory is that one trader (not an EA) entered $B instead of $M at either Market or Limit. The effect on Forex was negligible compared to Equity.
  • #19
  • Jul 3, 2011 4:48pm Jul 3, 2011 4:48pm
Quoting Rob Mondave
May 6 2010, and it was ES (e-Mini S&P 500 Futures). The inconclusive theory is that one trader (not an EA) entered $B instead of $M at either Market or Limit. The effect on Forex was negligible compared to Equity.
Well I don't know about you, but I wouldn't call a 842 pip drop on A/J in one day negligible. Each to their own I guess.
Nothing worth having is easy.
  • #20
  • Jul 3, 2011 5:03pm Jul 3, 2011 5:03pm
Quoting Rob Mondave
May 6 2010, and it was ES (e-Mini S&P 500 Futures). The inconclusive theory is that one trader (not an EA) entered $B instead of $M at either Market or Limit. The effect on Forex was negligible compared to Equity.
How about reading the facts instead of repeating hearsay. It was caused by a couple of badly programmed algos, not by a human trader confusing $M with $B.

http://sec.gov/news/studies/2010/mar...nts-report.pdf
http://www.nanex.net/FlashCrashFinal...shSummary.html

And a $200 mil order will move EUR/USD 50 pips. Source: Oanda and others.
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