Formalising common approaches to trading - page 10
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Imagine absolute liquidity. This means that someone infinitely rich buys for example at 99.99 and sells at 100.00. He has placed limit orders of huge sizes and deals will take place only at these prices (if the minimum price step is 0.01). The price won't move, for Christ's sake))))
Better yet, just open a demo at your broker on the exchange (or ECN) and see what the market has. The double auction is the main pricing method today and it only strengthens its position in all markets (including forex). Limit orders and market orders are an integral part of this mode of trading.
The second most common match is over-the-counter trading of the negotiated type. This is when a narrow circle of traders and not all are equally trusted))) The announcement of buy/sell prices by the participants is not binding, but the subject of a tête-à-tête discussion)))) But even this scheme, like dealing, boils down to the elementary - there are those who offer a deal on their terms: buy/sell, and those who accept their terms: buy/sell. Hence the 4 powers.
I am aware of the technical side of bidding. How to formally derive the 4 powers from this technical side - you can do so, as you suggest, if it were not for doubts - what is the economic difference? If the market has no sense of whether limit or market orders are being executed, then what is the difference? If it does, what difference would it make?
And getting back to liquidity - a billion limit orders will not create a single gram of liquidity, but will be frozen in perpetuity in a totally illiquid market, until someone comes along who is willing to deposit, at least on one of the limit orders. So, I would still like to know the purpose of introducing the terms liquidity to buy or liquidity to sell. In my opinion, these two terms + market buyers, market sellers are meant to refer to supply and demand differently in terms of order execution technique, nothing more.
Let me try to put the speculative trading problem in general terms.
1. You need movement to make a profit. That is, the market side must be stronger than the corresponding limit side. For example, to buy it is necessary to enter before the moment when the MB side absorbs the LS side within a significant price range. I.e. it is necessary to determine the moment of a certain drive.
2. You should enter before or at the beginning of the drive. For the same buy, you can enter on the MB side or on the LB side. The first option is to enter at the start of the target drive. The second is an additional prediction that LB>MS.
Here, for example, "the market side must be stronger than the relevant limit side" - isn't it more correct to write that demand must be greater than supply?
I am aware of the technical side of bidding. How to formally derive 4 forces from this technical side - you could do so, as you suggest, if it were not for a doubt - what is the economic difference? If the market cannot feel whether the Limit order or market order is executed, then what is the difference? If it does, what difference would it make?
And getting back to liquidity - a billion limit orders will not create a single gram of liquidity, but will be frozen in perpetuity in a totally illiquid market, until someone comes along who is willing to deposit, at least on one of the limit orders. So, I would still like to know the purpose of introducing the terms liquidity to buy or liquidity to sell. In my opinion, these two terms + market buyers, market sellers are meant to refer to supply and demand differently in terms of order execution technique, nothing more.
Vita, I don't understand what the yard limiters are with uncommitted money as well as the rest. You and I seem to be speaking different languages :)
Ratios like MB(dp1,dt1)>>MS(dp1,dt1) buyers across the market at a given time interval and prices much higher than sellers. And if also MB(dp1,dt1)>LS(dp1,dt1) then the price will rise by more than dp1 in time dt1.
How can this be at the same time? Who covered the volume difference MB - (MS + LS) >
Vita, I don't understand what the limit yard is with the undeposited money as well as the rest. You and I seem to be speaking different languages :)
OK, let's forget about liquidity. What difference does it make which order the market will execute? Why divide into market and limit from an economic point of view? As if for the third time I'm waiting for an answer, not a link to look at the market rate.
Economically there is no difference. By and large, there is only a bid (order) and a demand/supply, but it is still more convenient to explain it the way Slava does. What is the point of being so principled over nothing?
Economically, there is no difference. By and large there is only bid (order) and demand/supply, but it is still more convenient to explain as Slava does. What is the point of being so principled over nothing?
To what then, where does an inequality of the type MB(dp1,dt1)>>MS(dp1,dt1) suddenly have predictive power?
Obviously, total purchase volume equals total sale volume. B = S
By separating the volumes of limit and market orders we obtain MB+LB = MS+LS.
The MB+LB = MS+LSequation is observed in any area, whether falling or rising, and if there is no difference between MB and LB for the market, then these values complement each other no matter where the market goes, and inequalities of the MB > MS type do not tell us anything and are of no predictive value.
To what then, where does an inequality of the type MB(dp1,dt1)>>MS(dp1,dt1) suddenly have predictive power?
Obviously, total purchase volume equals total sale volume. B = S
By separating the volumes of limit and market orders we obtain MB+LB = MS+LS.
On any stretch, whether falling or rising, the equation MB+LB = MS+LSholds and if there is no difference between MB and LB for the market, then these values are complementary regardless of where the market goes, and inequalities of the type MB > MS tell us nothing and have no predictive power.
Vitaly, you have it wrong . B = S only for completed trades . For price last . The rest is also correspondingly wrong .
Vitaly, you have it wrong . B = S only for completed trades . For price last . The rest is also wrong accordingly .
Now that's interesting too. How do incomplete trades affect the market or prediction at all? More details please, for I see MB and MS are in fact accomplished trades, not attempts, not heartfelt wishes. LS or LB - are there any incomplete deals lying around? How would you count them? In the glass?
Of course in the glass.
"MB and MS are in fact accomplished deals" - no, that's not true either, it's just an order that may not be honoured. It's exactly "attempts".