Lot sizing, can you really feed the market 200 Lots? really?

Trading Discussion
#1

Hi Traders,

I’m a little baffled about this topic, at what point does your order become so ridiculously crazy huge that even the Banks are laughing at you? ha-ha, well that leads me to another question, who has visibility on such orders??

As the title of this thread suggests, can you really feed 200, 300 Lots into the market? I am aware the majors have a lot more liquidity, however is it possible to even measure liquidity in any given currency pair?
Anyone?? much appreciate your thoughts guys…

Cheers,

Birdman

#2

Hi Birdman,

what do you mean by ‘liquidity’… I assume that you mean volume?

Sure, you can look at Commitment of Traders reports by the CFTC every Friday,

and that will tell you how much open interest (number of currency futures contracts)

there is on a particular currency…

As for your other question: (200 x 100,000=)20,000,000 currency units are not exactly

something that most retail traders here would have ready access to… Do you?

#3

For the international interbank market, 20 mill is not a big amount at all. But channelling 200 lots through a retail broker into the interbank market is a different matter.

I am not familiar with this area but I would guess that broker liquidity providers place their own exposure limits on their broker clients and the broker would limit its own exposure to single customers. Risk control is important at all levels of the market.

However, I guess there would not be a problem with this kind of exposure if you spread it amongst various brokers and build a position over time, for example (if you have sufficient margin!). But, to be honest, if someone were truly dealing in 20 mill positions they would not be trading through a retail broker at all but would have direct access to the interbank market through a client account.

#4

Oh if the least of my problems was how do I push 20 mill on the market. I mean honestly bro…

#5

Hahah

Don’t you too feel like saying…

#6

Hi PipMeHappy,

thanks for the reply, yes I do mean volume. The reason I ask is I have been analysing a demo account from myfxbook that has grown a $5k deposit to $1.4m over a 2 year period. I noticed towards the end of the statement as the account has grown, so have the Lot sizes logically and noted they were placing 300 Lots in some trades. I guess I want to know if this is realistic? and feasible on a real account. I personally dont have that size account however I do frequently trade up to 10 Lots.
Cheers,

Birdman

#7

dude, the reason I asked i was analysing a spreadsheet from myfxbook…It is a Demo acc I am aware, however the account still displays an impressive performance. The accounts starts with $5k balance and in 2 yrs is $1.4m, towards the end of the statement the trades were increased to 200, 300 Lots…can this be achieved on a live account dude? thats the question here :smiley:
Thanks for the reply mate.

Birdman

#8

does this apply with ECN brokers?

thanks for the reply…

Birdman

#9

Guys, hopefully that clarifies what seems to be such a ridiculous question. If you want to see the account I am referring to I’m happy to send to you…

#10

Maybe Lexys, Turbonero, Emerald, Peterma, Clint may be able.to.help…

#11

I’m going to suggest that if you grew your account at this rate you would attract a lot of attention from your broker. I would also suggest that you would have long passed the need to use retail/bucket shop brokers ECN or not. You’ll have prime brokers fighting to get hold of your account. Also, with these sort of funds available are you still going to be searching for 50+% returns a month. Hell no. A 5% return is still going to yield 1/2 million a year. So that 200 lot trade you want to place will now only need to be 20 lots.

Then on a final note. If by chance one day you did crack the magic million, hand your money over to your bank. They’ll look after you rather well and you won’t have the head duck that is speculating.

But to answer your question, my broker has a max lot size at 100, so you couldn’t trade to match.

#12

Excellent point, Bob…

Speculators may go for short-term gains of that magnitude, but investors seeking stable returns [I]over longer periods[/I] would avoid such high-risk operations and channel their energy (or pay someone to
do so on their behalf) into low-risk capital preservation.

This is why the USD is less valued during risk-on times but very valued during risk-off periods, as a safe haven
into which capital can be parked for safekeeping.

Our retail mentality is very much geared toward raising capital, whereas large capital holders are very much seeking capital preservation above all else. That is why even FX desks within the commercial trading sector (banks) hedge through, for example, options: every investor needs protection against loss… We may (or may not) use stop losses; larger investors or speculators may use hedging or safe-haven assets, but in the end, it all boils down to the same principle…capital preservation…

I am sure I am getting a lot of my facts wrong, so please if there is someone in the know, do come back and point out my flaws (I have no experience of working in banks, nor of having large capital, so I am only regurgitating second-hand knowledge, if you like)!