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At what lot size/account size do you have scale issues?

  • #21
  • Mar 26, 2017 7:10pm Mar 26, 2017 7:10pm
Quoting JensG
Are you guys aware of that thread? https://www.forexfactory.com/showthread.php?t=525741 In my opinion, a good broker is more than happy to help you how to best place big orders. I don't want to say all MT brokers are bucket shops but just the required bridge (which is frequently sourced out) means the broker gives up control. It is certainly not the best environment to max things out.
Yeah, I might need to eventually go the prime broker path. I was in talks with Citi about bespoke stuff but they would obviously not want to do anything with me until my account was over 1 million. Which to me probably totally makes sense for them.

You were talking about prime brokers right? Does anyone here have any experience with them?

Me, I'm about 100,000 max account size right now and that is a bit stretching. I like to grow organically from a small account for the most part. But, yeah eventually I'd be looking at prime.
  • #22
  • Mar 27, 2017 4:14am Mar 27, 2017 4:14am
I was talking about prime of prime, not prime.
  • #23
  • Mar 27, 2017 5:18am Mar 27, 2017 5:18am
Nice question. Occasionally i need to move about 300 to 500 million to trade a position. I have not tried to dump all of it and will probably get partial fills, so i wrote an algo that trades random lot sizes between a specified range (say 5 million to 10 million) to build up to my total trade position and i also randomize the execution. Only once did i execute a large order, i think it was around 50 million and did get slipped although not much considering it was a highly liquid time.

I currently go through a third party that is trading through a prime broker. For me its not essential that i dump large lots and my strategy allows me time to get into a trade, so i can slowly drop order without the market moving too much. I used to have a scalper friend how had issues when his orders became larger than 50 million about 7 years ago...so things have changed since then.

Does your strategy permit you to enter at your leisure...like maybe break up a large size and enter market gradually or do you need to open large positions quickly?
  • #24
  • Mar 27, 2017 6:16am Mar 27, 2017 6:16am
Quoting lightspark
Nice question. Occasionally i need to move about 300 to 500 million to trade a position. I have not tried to dump all of it and will probably get partial fills, so i wrote an algo that trades random lot sizes between a specified range (say 5 million to 10 million) to build up to my total trade position and i also randomize the execution. Only once did i execute a large order, i think it was around 50 million and did get slipped although not much considering it was a highly liquid time. I currently go through a third party that is trading through...
Light Spark,

Could you please tell what the dollar amount meant in terms of lots?

Thanks
  • #25
  • Mar 27, 2017 6:42am Mar 27, 2017 6:42am
Quoting aaven
{quote} Light Spark, Could you please tell what the dollar amount meant in terms of lots? Thanks

Sure, 1 standard lot is 100 000. So i trade anywhere between 300mil to 500mil OR 300 to 500 LOTS.
  • #26
  • Mar 27, 2017 11:25am Mar 27, 2017 11:25am
Quoting lightspark
{quote} Sure, 1 standard lot is 100 000. So i trade anywhere between 300mil to 500mil OR 300 to 500 LOTS.
Thanks Lightspark. If it's alright, could you answer these:

1. You mention about breaking the orders into chunks, so how long does it take to fill them all?

2. I am curious, how much is your S/L and your take profit on your each trade? The reason i am asking is, i read somewhere that once you reach a large size(although the term is relative), the market will start taking advantage of your exposure....

3. 300 to 500 Lots is an impressive size: Did you have to over come any psychological barriers before playing with such sizes. In general, what was your scaling approach?

Thanks
  • #27
  • Mar 27, 2017 6:12pm Mar 27, 2017 6:12pm
Quoting lightspark
{quote} Sure, 1 standard lot is 100 000. So i trade anywhere between 300mil to 500mil OR 300 to 500 LOTS.
Don't want to play mr. smarty pants here but 300 million are 3000 lots, not 300.
  • #28
  • Mar 27, 2017 6:50pm Mar 27, 2017 6:50pm
Quoting JensG
{quote} Don't want to play mr. smarty pants here but 300 million are 3000 lots, not 300.
I noticed that too but I assumed he's on a different account type or broker type. Typically 1 standard lot is 100000 units so yeah, 3000 standard lots would be equivalent to 3 million units.
  • #29
  • Mar 28, 2017 2:49am Mar 28, 2017 2:49am
Quoting JensG
{quote} Don't want to play mr. smarty pants here but 300 million are 3000 lots, not 300.

Yes that's correct. Sorry for that error. Its 3000 lots
  • #30
  • Mar 28, 2017 3:08am Mar 28, 2017 3:08am
Quoting aaven
{quote} Thanks Lightspark. If it's alright, could you answer these: 1. You mention about breaking the orders into chunks, so how long does it take to fill them all? 2. I am curious, how much is your S/L and your take profit on your each trade? The reason i am asking is, i read somewhere that once you reach a large size(although the term is relative), the market will start taking advantage of your exposure.... 3. 300 to 500 Lots is an impressive size: Did you have to over come any psychological barriers before playing with such sizes. In general,...

Sorry for my mistake, but the users above corrected me. Its actually 3000 lots. I guess i'm more used to the $ amounts. Anyway
To answer your questions:

1. To fill an order of about 300mil, it typically takes about 40 seconds and i personally have never tried to shorten the time as there was no need. I wrote an algo to break up the 300mil into smaller chunks and algo execute them at random time stamps (anywhere from 100milliseconds to 1.5 seconds). I don't scalp and therefore i have ample time to execute. how that was clear, let me know if i am incoherent.

2. That is an interesting questions and although i cannot share some bits, i will say as much as i can. My stop loss is dependent on where i feel the market is kinda afraid to go...like i try to identify liquidity zones in the market and place my stop losses there (can range from 20 pips to 40 pips) but it depends on many factors and not all trades are the same. About the part regarding the market taking exposure.....all i can say is that this might be the case in certain market conditions but not always. The trick is to identify when the market is not going to go against your exposure and therein lies my strategy. A little clue....its a rare occurrence maybe a few times a month.

3. I had the good fortune of trading young with my dad and by the time i was a teen i was quite used to seeing losses exceeding a few thousand usd. Its a tough questions and i would be lying to suggest an exact method. There was no secret or scaling approach as such. As my portfolio grew and became diverse i began increasing my exposure. I have had large losses in the past too like almost all traders, but with time and practice, i seem to get better.

If i could impart something i wish someone told me earlier, is that "Forget about making money, trade the market because you have a desire to understand and learn and ASK YOURSELF QUESTIONS OVER AND OVER AND OVER AGAIN" like if you see something on your chart....ask yourself WHY? its the most powerful tool. I remember when i was young, i would ask myself WHY the market moved the way it did over and over again until i began to see certain "things"

hope that helps
  • #31
  • Mar 28, 2017 10:17am Mar 28, 2017 10:17am
Quoting lightspark
{quote} Sorry for my mistake, but the users above corrected me. Its actually 3000 lots. I guess i'm more used to the $ amounts. Anyway To answer your questions: 1. To fill an order of about 300mil, it typically takes about 40 seconds and i personally have never tried to shorten the time as there was no need. I wrote an algo to break up the 300mil into smaller chunks and algo execute them at random time stamps (anywhere from 100milliseconds to 1.5 seconds). I don't scalp and therefore i have ample time to execute. how that was clear, let me know...
Thanks Light Spark for sharing your experience. Your patience and effort is much appreciated.
  • #32
  • Mar 28, 2017 10:58am Mar 28, 2017 10:58am
Quoting tunera
fx is the biggest international market of the world. you can easily buy or sell 100 lots (10 millions) and not move the price at all, not even of one pip. as long as you are not trading billions, you should not care about scalability issues.
Of course you can open big size orders and even more than big, without moving the price as a retailer, but first be sure that your broker pass the order to the real market! Obviously, most of the brokers, especially those heavily advertised, they did not trade in the interbank market. Immagine what game can play with you when you open a 100 lots order....
  • #33
  • Mar 29, 2017 12:04pm Mar 29, 2017 12:04pm
Quoting anlod
{quote} Of course you can open big size orders and even more than big, without moving the price as a retailer, but first be sure that your broker pass the order to the real market! Obviously, most of the brokers, especially those heavily advertised, they did not trade in the interbank market. Immagine what game can play with you when you open a 100 lots order....
in truth, nowadays most of "stp" or "ecn" or "ndd" retail brokers (basically all the popular fx brokers) do really pass your orders in the market.

even then however, you are not going to move the price, because only market makers (liquidity providers) can make prices.

what you will do when you buy 100lots, you will consume the offers at the ask, worst case scenario you may get filled 1pip above the current ask, still the bid price would not move higher automatically, only the ask price, and only for a fraction of a second.

the brokers now are heavy regulated and controlled, so if they say they are stp or ecn or ndd, they really are (unless we are talking about some unpopular unknown unregulated broker with offices in some small unregulated island)!

as for the games that can be played against big positions, such games would be played directly by market makers, but i doubt they would care about a 100lots order.

If you open a 100.000 lots order maybe they can move price against you forcing you to take a loss, but it is an illegal practice and anyway the fx market is too big to be manipulated.

but make no mistake, this sort of manipulation (market moving against the majority of orders) happen all the time "naturally", when too many people buy and there is nobody left to buy, a small sell can move the market down, the downmove will force people to close their buys (they will sell as a result), creating more downmove, forcing more people to close their buys, etc.

it is not an evil "game" perpetrated by some bad guys, it is just how markets naturally works.
  • #34
  • Mar 29, 2017 1:48pm Mar 29, 2017 1:48pm
Quoting tunera
{quote} in truth, nowadays most of "stp" or "ecn" or "ndd" retail brokers (basically all the popular fx brokers) do really pass your orders in the market. even then however, you are not going to move the price, because only market makers (liquidity providers) can make prices. what you will do when you buy 100lots, you will consume the offers at the ask, worst case scenario you may get filled 1pip above the current ask, still the bid price would not move higher automatically, only the ask price, and only for a fraction of a second. the brokers now...
Tunera,

Thanks for your insights.

Could you elaborate/give any examples of such games by market makers.

"as for the games that can be played against big positions, such games would be played directly by market makers, but i doubt they would care about a 100lots order."
  • #35
  • Mar 29, 2017 4:35pm Mar 29, 2017 4:35pm
Quoting aaven
{quote} Tunera, Thanks for your insights. Could you elaborate/give any examples of such games by market makers. "as for the games that can be played against big positions, such games would be played directly by market makers, but i doubt they would care about a 100lots order."
https://en.wikipedia.org/wiki/Forex_scandal
  • #36
  • Mar 29, 2017 9:20pm Mar 29, 2017 9:20pm
Quoting tunera
{quote} https://en.wikipedia.org/wiki/Forex_scandal
Thanks Tunera...
  • #37
  • Feb 5, 2024 5:45pm Feb 5, 2024 5:45pm
so am i correct when i say that the solution for trading big positions is to trade through a prime of prime broker? And could you then trade 10 -30 million dollars? How about on scalp trades?

i have been looking at a funded account that scales up to 10 million dollars.. makes me wonder if the prop trading firm trades through a prime of prime.broker.. if that provides the required liquidity, theyd be crazy if they didnt with such money at their disposal.

Or is perhaps 10 milliom really not an issue slippage wise? Even on scalp trades?
  • #38
  • Feb 14, 2024 4:16am Feb 14, 2024 4:16am
The scaling problem is easy to resolve.

Simply open more accounts with multiple brokers, split the funds, run multiple MT terminals in portable mode (each account in separate terminal) and use trade copier to copy automatically the positions from your main terminal to the other terminals.
  • #39
  • Feb 24, 2024 11:17am Feb 24, 2024 11:17am
Quoting alphaomega
The scaling problem is easy to resolve. Simply open more accounts with multiple brokers, split the funds, run multiple MT terminals in portable mode (each account in separate terminal) and use trade copier to copy automatically the positions from your main terminal to the other terminals.

Up to how big a position per broker? And does this also hold up for scalp trades.. ?
  • #40
  • Last Post: Feb 24, 2024 11:30am Feb 24, 2024 11:30am
Quoting StefanN
so am i correct when i say that the solution for trading big positions is to trade through a prime of prime broker? And could you then trade 10 -30 million dollars? How about on scalp trades? i have been looking at a funded account that scales up to 10 million dollars.. makes me wonder if the prop trading firm trades through a prime of prime.broker.. if that provides the required liquidity, theyd be crazy if they didnt with such money at their disposal. Or is perhaps 10 milliom really not an issue slippage wise? Even on scalp trades?

for those wondering i have contacted the prop trading firm in question, and they stated that they work with their own liquidity providers, and that they can handle the volume in question, namely 10M usd.. on the question if it also holds up for scalp trades they were a little more vague, they stated that "it was allowed" with their account. This leads me to the conclusion that 10 M usd positions are definetly possible in day trading, and quite possibly also for scalp trades.. when traded through a prime or prime of prime broker.
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