At what order size does it really make a difference?

[mj2009]

Just more curious than anything, but I know there isn't a way to really tell to an exact answer ..

But at what size does an order, nominated in dollars or pips, really take an effect on the flow of a currency pair?

& is there a good reference for the average life-span of an order?

thanks.

[profedu2001]

Please re phrase your question so that we can understand it better, may be an example would help.
Cheers

[Jezzode]

I'm just shooting in the dark, but id say a reasonable order size is floating around the $10M level, which is the notional value of the order. This would be equal to 100 lots in say gbp/usd or eur/usd and would equal $1000 per pip.

I've recently seen a documentary, although an old one, where commercial traders will keep firing off $10M trades to prop price up in the market at a given level. If I remember correctly this was a Barclay's trader trading into the London Session, all be it about 30 to 40 years ago!

You must remember though that Liquidity plays a key role in just how significant a order may be in moving price. It's a difficult question to answer, and one that I've always been interested in knowing....How much do you have to trade to move the market, or what would it take

[profedu2001]

10,000,000 lots can actually move up to 30 pips if 100,000,000 moved GBPJPY by 300 pips

[Jezzode]

I don't understand how you calculated that...or where you got the figures from

[profedu2001]

I read somewhere about a $1 billion intervention that moved the said pair by 300 pips, I watched it happen, so I was only thinking aloud that if $1 billion could move the market by 300 pips, perhaps $100,000,000 would move it by 30 pips. IMO

[Sarrafx Trading]

It is impossible to correlate market movements in the manner you suggest.

There are just too many factors.

As an example years ago I was working the night shift for a major bank. On a sunday night (europe time) as the market opened in Wellington, we would often open a position in a smallish amount in Gbp/Usd. I have seen a Gbp 5 mio position move the market 200 pips if it is caught right.

Alternatively I have seen Eur 500mio have virtually no effect.

[profedu2001]

Like I said in my earlier post, thats in my own opinion, I am not saying you can take it to the bank and cash, but I strongly believe in this theory, like you rightly said, there are too many factors, but try identifying the various factors and you would really be amazed.

Again the 200 pips move you mentioned could probably not be your former banks trades that pushed it, there could also be some other market makers who wanted to flex their muscles.

But again, this is only my opinion

[Jezzode]

I guess it all comes down to order flow at the time of the trade being lodged in the market. Just like the 'Flash Crash' when many sell orders all got activated from one single initial sell order. It would be incorrect to say that the initial sell order was what moved the market.

[Sarrafx Trading]

Well in the case I mention it is a snowball effect without doubt