To trade or not to trade Indicators? - page 2
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If i may ask you , I have heard o lot of times the expression, "trader`s are pushing the market ". Are you familiar with that expression? And if yes , could you please tell me what is actually happening when trader`s are pushing the market ? Is the effect of the one`s pushing the market directly related to the market move ore indirectly .... If the pushers are buying , the market will go long ore short?
Hu Mihai,
Indeed traders are pushing the market. Who else can push the markets...
But there is a big difference between forex and the "normal markets" like stockmarkets that everybody is familiar with.
In the stockmarkets and the futures on those markets, it is indeed you and me and all traders that push the markets. If there are more people that buy then sell that will drive price up and the more people sell then people that buy will drive the markets down.
So if you trade on stock markets or their futures you are directly and immediatly a part of that market. You are a little drip in the ocean that is pushing that market.
But the price of a currencys is set in a total different way.
The majority of traders on the forex or with MT4 platforms think that they drive or push the markets. That is absolutly not the so.
All of us that sit with our brokers on MT4 platforms are a very very small part of the market.
They say that forex is the biggest trading market. They say that it has every day a 4 trillion$ turn over. That is true but not true.
That 4 trillion$ daily turnover is not made by us traders on all our MT4 platforms but by global economy.
Let me give you an example that will speak to your imagination.
Lets say that a country like Qatar decides to buy 20 airbus A380 airplaines. That is a severall billion euro deal. But the delivery of such a product will take several years. So they agree on price but they don't know what the price of the euro will be the date of delivery. So Qatar will not take any risks that maybe on the date of delivery that the price of the euro would be a lot higher then the day of signing the contract. So they ask their bank to reserve that money (euro's) on the price of the day that they sign that contract. That means that their bank needs to take in the necessary positions on the euro.
Now that is a deal with airplanes. But you need to see that same principle on every every every business deal that is made every day globaly between buyers and sellers that have different currencys. And that makes that the currency market is a 4 trillion$ market and the banks that need to cover those position are driving the price of currencys in a certain direction.
So it is the big banks that push the price on currencys and not you and me who trade with an EA or take in some manual trades because we are only interested to skim off a couple of pips on the moves that the banks create.
That is why I smile every time when I read that a person here on this forum says that he had a certain position and that his broker pushed the price to his stoploss and once he was stoppped out that the market went back the other way. Just imagine that they would manipulate a 4trillion$ market just to stop out someone who sits in a postion with 3-4 mini lots...
. His position is like 1 star in the milkyway.
All brokers have the same price on a few pips difference because of the network that they create with their clients. So impossible for them to move price up while the rest of the currency world would go down.
The banks bring a part of their liquidity to the brokers on MT4 platforms.
I hope this gives a little bit more insight how price is set in normal markets and how it is set in currency markets.
Friendly regards...iGoR
Hi Mihai,
Before you say that you totaly disagree you should carefully read what Forexerof2011 asked me!...
His question was what would happen if the WHOLE world would go long all at the same moment? The whole world is the whole world That is all traders and all liquidity providers and banks and institutes and private traders etc This means that nobody wants to go short.
When you would know how markets work then you would know that for each person that wants to sell there needs to be someone that wants to buy. For each person that wants to buy there needs to be someone that wants sell.
If you have already encountered spreads that got wider, then that was because less people want to sell and or buy.
If the whole world wants to go long and NOBODY is selling any contracts then the bid price will drop to zero.
You can say that you do not agree but you need to accept that this is the way that markets works. Again the whole world is the whole world without any exception. That was how Forexerof2011, frased his question. I know that his question is impossible but I gave the theoretical answer to it.
Friendly regards...iGoRI'm agree with iGoR. The brokers have to offseting (matching) the prices.
If you want to sell $1,000,000 somebody must to buy.
If not buyers you will have offquotes, etc.
Small brokers are not offseting mini or micro accounts.
With losers money are paying winners.
Hu Mihai,
So it is the big banks that push the price on currencys and not you and me who trade with an EA or take in some manual trades because we are only interested to skim off a couple of pips on the moves that the banks create.
Friendly regards...iGoRThe issue at hand ...the theoretical question was : " IF EVERYBODY ... that includes banks " . So you are just telling us that indeed , it is actually possible?.... Anyway , please take the thread as informational and educational. Don`t take it nobody personally please. If i am arguing , i am doing it on the question at hand . The way the question was asked (everybody ) and everybody includes everybody ...well ... it makes me believe that it will create a win win situation ...for everybody ....even the banks, even the traders, even you Bongo . Off course, nobody could reenter the move due to the offquotes , but that is valid only for the traders . Still , the one`s already caught in the move, would theoretically benefit from it .