This is OBVIOUSLY a hypothetical question BUT do you think that people like us (I think we are known as ‘Retail Traders’ i.e. we are not brokers), given enough $$$ - and then some more $$$, could actually make a difference to the price of a pair?
I mean - if I had $100 000 000.00 USD in my account at GCI and decided that I wanted to buy Euro’s for that amount - do you think that it would actually make the price change one way or the other globally?
(I suppose you can tell that the market is quiet now until Asia opens as it is usually at around this time that these ridiculous ideas come into my head).
It would be entirely impossible for a retail trader to move the market. A trade of 10 yards could potentially move the market but rarely will this occur. Large enough positions to move the market are unloaded in portions at select levels. Generally massive real-money trades that take place in the market are executed at many different price levels and the currency positions are ofter synthesized through other products… There is more that one way to gain currency exposure.
for instance: If i have a canadian dollar account and i want to buy US stock. I must get long the USD in order to buy an amount of stock. Since I became long a US stock and short the Canadian dollar, i now have a long USD/CAD position which needs to be covered, so in order for me to have no currency exposure during my equity trade i must sell an equivalent rate of USD/CAD.
This is an example of how the institutional side works.
ex.
company ABC costs 20.00$USD / share usd/cad 1.1220 /23
10 000 shares costs 200 000.00USD
Account balance = 1 000 000.00 CAD
buy 200 000.00 USD / sell 244 600.00 CAD
Net position = Long 10 000 shares - Short 244 600.00 CAD
which means - im Long USD/CAD 200 000.00 — so to cover my exposure i must sell USD/CAD 200 000.00
If you wanna move a currency assasinate someone or just think real hard.
!!! most dealers algorithmically play against your orders. a 50 pip stop doesnt necessarily mean 50 pips. usually means 42 !!!
Here’s about the only way any forex trader could move the market.
Trader puts in a big order - one large enough to push prices a little (which would take a lot of size in a normal market, maybe less in a quiet one).
The change in price triggers a collection of orders in the market that push the market further.
No one single trade done by any trader (retail or professional) will make a sustained move in price, regardless of the size. It takes sustained order flow (or at least the belief in the market of it) to do that.
I got to disagree. There are institutions that have the money to make price go a long way. Yentervention comes to mind. Yes others hoped on the bandwagon but you can tell me they could not do it anytime they want.
My point about sustained order flow (or the belief in the market of it) is applicable here. Intervention moves the market because of the assumption there will be more to follow. If there is no such assumption the market will stop moving as soon as it’s processed the intervention order, and may start reverting. Likewise with a big order from anyone else. Once it is processed through the market will stop moving. There needs to be more behind it to keep the move going.
Nice catch no I didnt notice that. What the hell was it doing it the newbie section as if it was new. Lol I could understand if I had been drinking but I am still at work. Well for the next few minutes anyway. This just is not right. lol
Nope, not gonna happen but again, hypothetically, it could happen provided you have the money to burn…but that’s all good for a movie script or a book.
very informative guys, and thanks for droping by the newbie section, its always fun reading what you guys have to add, I was thinking that yeah we might be able to manipulate the market given the right amount but, I guess the possibility that it might actually happen is a lot closer to 0%
I have to agree with you - yeah, this thread has been fun to read. Extending the query, since its not possible to tweak the market, is it possible to predict the market? Again, the answer would have to be no. Everyone is out on the quest for that holy grail and so far, no one’s found anything yet. Not going to hold my breath for the perfect EA and the developer would have to be an ass to put it out on the market…but then again, this is forex so guess anything can happen…
I was thinking that yeah we might be able to manipulate the market given the right amount but, I guess the possibility that it might actually happen is a lot closer to 0%