Would it be possible to actually manipulate the Forex Market?

[dpaterso]

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).

Regards,

Dale.

[gotpips?]

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 !!!

[dpaterso]

Thank you for that - most informative.

Dale.

[rhodytrader]

Here's about the only way any forex trader could move the market.

1) 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).

2) 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.

[toptick07]

*sigh*

I miss George Soros...