Trading size in FX | Forex Factory

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Trading size in FX

  • #1
  • First Post: Nov 26, 2015 11:12am Nov 26, 2015 11:12am
I am curious as to the size that an average retail trader trades. I know it's a loaded question that must take into account the size of the account, trader risk aversion, experience etc... But I just want to gauge what the answers are. I know that there are boardlots, mini lots, and micro lots and different brokers define them differently. I myself have 50k in my account and I am fairly risk averse wanting to keep my pip stop loss pretty tight (btwn 8 to 14 pips).

I want to know if trading a 200 or 300k position, is considered large in terms of :

1. Will that affect my on stop limit trades (i.e. what the broker guarantees in fast markets)
2. Will 200 to 300k affect slippage?

I am assuming no to each of the above, but would like to hear some honest answers.

G
  • #2
  • Dec 2, 2015 4:10pm Dec 2, 2015 4:10pm
Quoting gloo68
I am curious as to the size that an average retail trader trades. I know it's a loaded question that must take into account the size of the account, trader risk aversion, experience etc... But I just want to gauge what the answers are. I know that there are boardlots, mini lots, and micro lots and different brokers define them differently. I myself have 50k in my account and I am fairly risk averse wanting to keep my pip stop loss pretty tight (btwn 8 to 14 pips). I want to know if trading a 200 or 300k position, is considered large in terms of...
It really depends on the pairs you trade. The overwhelming among of liquidity in FX is concentrated in E/U with G/U and U/J being the runners up. From there it goes down drastically as far as the other pairs are concerned. The volume per second is less than most traders think it is. Size per second on E/U is around 10 mill on average, while for less major pairs it can drop to around 200,000k per second. This is if you have access to a decent retail ECN with sufficient liquidity aggregates.

At a size of 200k to 300k and without going into too much details concerning the various brokers, in general you should not have a problem getting out when you need to.

However, liquidity gaps on either the bid or the ask side (when the liquidity gets sucked from one side to the other) do occur. Around news releases anything is possible when it comes to liquidity drying up. But this depends on how your brokers handles these new release periods which is an issue that can be very broker specific. Also consider the CHF debacle as an example of what can happen.
  • #3
  • Last Post: Dec 2, 2015 5:35pm Dec 2, 2015 5:35pm
Oanda's execution policy states that for trades above 100k they can charge an additional pip due to higher clearing cost. I know that this is a pretty specific example but maybe it's still worth mentioning.
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