Why does the price move? The answer is here!!! - page 4

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sergeev:
OK. What then is the mechanism of price movement after an order is triggered?
Thank you in advance for a normal answer.
My answer will not seem normal to you either, but I will insert my "five kopecks". You can't hope to measure how much the water level in the world's oceans has changed if you scoop out a bucket - the scale is not comparable. Though, it has diminished by exactly the same amount as yours. If you pour it back, "inter-absorption" will exactly take place, but then, suddenly, a wave or tide will not let estimate the result of your "inflow" again. The price does not move "from the order triggering" or it moves exactly by one bucket - it does not reach a pip. Prices are driven by fundamentals, which is apparently why they are called that, or millions of small ones, stacking up randomly in time and space, forming additional small "ripples". There are also tsunamis, but they have their own causes. Looking for a direct cause-and-effect relationship between price and order in such a complex nonlinear dynamic system is probably something you can try, but so far as I know, no one has yet succeeded in doing so.
 
rsi:
sergeev:
OK. What then is the mechanism of price movement after an order is triggered?
Thank you in advance for the normal answer.
My answer will not seem normal to you either, but I'll give you my "five kopecks". You can't hope to measure how much the water level in the world's oceans has changed if you scoop out a bucket - the scale is not comparable. Though, it has diminished by exactly the same amount as yours. If you pour it back, "inter-absorption" will exactly take place, but then, suddenly, a wave or tide will not let estimate the result of your "inflow" again. The price does not move "from the order triggering" or it moves exactly by one bucket - it does not reach a pip. Prices are driven by fundamentals, which is apparently why they are called that, or millions of small ones, adding up randomly in time and space, forming additional small "ripples". There are also tsunamis, but they have their own causes. Looking for a direct cause-and-effect relationship between price and order in such a complex nonlinear dynamic system is probably something you can try, but so far as I know, no one has yet succeeded in doing so.


That's settled, then :-)
 
sergeev:
klerk:
the point is that the tick does not happen when a transaction is made, but when we receive requests to buy or sell.

OK. Even if on receipt of a request. But as I understand it, the broker (bank or fund or whoever) is not buying my lot, but is looking for a counterparty. And therefore will find the same opposite request. And everything repeats with a quote exactly the opposite. Right?


It is the counterparty that ultimately executes all buy orders - i.e. we buy all the time and it sells to us.

The reason for price movements is the execution of orders, not the placing of orders.

Let's say we have 3 sell orders: 10 million at 1.39, 5 million at 1.40 and 3 million at 1.42. The best price for the buyer in this case is 1.39, but it will be the same only if the volume of buying is up to 10 million. If a buyer places an order for 15 million, it will be executed at 1.39 and 1.40 (these very prices are used by the systems as ticks) and the next buy price will be 1.42.

There are moments when the liquidity in the market decreases (for example, upon release of important economic news) - banks simply remove their orders, as they don't want to risk freebies.

 
I'm very grateful to all participants of this discussion for their replies.
I want to draw conclusions in quotes from your posts.

klerk: - the tick does not occur when the transaction is made, but when requests are received

nickbilak: - the reason of price movement is the execution of orders, not their placing
- the counterparty eventually is some large bank

Vita: - Mutualisation of the two requests does not equalise the difference between supply and demand

rsi: - Prices are driven by fundamental reasons

rsi: Looking for a direct cause and effect relationship between price and order...no one has succeeded

Then how does forex work in general? One gets the impression that even the creators of forex themselves do not understand how it all works!

CONCLUSION:
sergeev: - all trading systems and synapses without knowing the big picture (large orders placed by big banks)
This is a complete nonsense and will NEVER be profitable.
The information on future quotes and pending orders is what we need to work in the market, not a knowledge of c++ and the ability to write MTS beautifully.
 
sergeev:
Very grateful to all the participants in the discussion for their replies.
I would like to draw conclusions in quotes from your posts.

klerk: - the tick does not occur when a trade is executed, but when requests are received

nickbilak: - the reason of price movement is the execution of orders, not their placing
- the counterparty eventually is some large bank

Vita: - Mutualisation of the two requests does not equalise the difference between supply and demand

rsi: - Prices are driven by fundamental reasons

rsi: Looking for a direct causal relationship between price and order...no one has succeeded



Great! Thank you! That's my best! :)
 
Информация об ордерах - this is what you need to work in the market

There is one subtlety - the full picture of orders is not visible from the outside, since there is such a thing as an "iceberg" of an order (only a small part of the actual order volume is openly published).

And to have this information you need to work for the very banks. but this condition excludes the possibility of earning in this way.

 
What do you mean by "a small proportion of the actual volume"? You mean not all orders? What is the point of such publications in general then?

"Opportunity to make money this way" - and I don't see any other way in the market yet, unfortunately
 

What do you mean? there is a real order for say 50 million, but the system shows it as 5 million.

It certainly does not hurt to understand the global picture, and everyone has their own way of doing things.

 
Can I see where they publish such data without "extra" zeros? Please give me a link.
 
sergeev:

CONCLUSION:
sergeev: - all trading systems and synals without knowing the big picture (large orders placed by big banks)
and will NEVER be profitable.
The information on future quotes and pending orders, that's what we need to work in the market, not a knowledge of c++ and the ability to write MTS beautifully.


The conclusion is wrong, even the part about insider trading.
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