lets imagine you have an infinite amount of money for arguments sake while using really high amounts of leverage say you place 10 50 lot positions on natural gas
commodity is a 20 Trillian a year market
how would you know with no order book that the second you push that button your not going to be filled extremely poorly say 50 pip drawdown with no idea to how much liquidity at least on average sits at a level
at some point you surely would run into a scaling problem yes yes i know supply and demand but this only gives us a reference point by looking at the volume on a level we still don’t know whether the market would handle your order or fill it same with closing
how do institutions that trade in the 1000 lot 3000 lot know if there is enough liquidity
bonus if you have worked at a institution