Formalising common approaches to trading - page 23
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Suppose there are 1 000 lots in the market, 100 of them are mine, if I close with a profit of 10 pips, then there will be 900 lots in the market, who will give me my profit?
The one who bought 100 lots from you, at the price you sold him.
Whoever bought 100 lots from you at the price you sold him.
OK, where will the price be? will it go down?
Price - bid and ask as we see them in MT4 ( this is us agreeing on the terms ))
At what point? At the moment you sell at bid price which you see and you are happy with it and you click CLOSE POSITION // sell --------- ?
If YES, then assume that the buyer was willing to buy all 100 lots from you at the price he put up.
So he bought, you sold. If somebody else wants to buy at that price (you'll see his request with the volume at that price), nothing will change from the bid price
If nobody else wants to buy at this price, the bid will change and the next (lower) bid will be shown
Ask has a life of its own.
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If a buyer has a 20-lot order and you click CLOSE at any price, the broker will start choosing a volume for you down in the stack until you reach 100 lots
the closing price of 100 lots of course will be different from the Bid you were watching. this is slippage
If no one else wants to buy at this price, the bid will change and show the next (lower) bid from the cup
the ask takes on a life of its own
It is true, but does the spread not widen to infinity? Does someone compensate to keep the spread within certain limits?
Roughly - if the market decides that it is a trend, the Ask will be lowered; if it decides that it is not a trend, new bids will appear quickly at empty positions and the spread will be restored.
It is true, but does the spread not widen to infinity? Does someone compensate to keep the spread within certain limits?
This is the task of market makers.
This is not a forex thread, and providing liquidity to market makers is not an easy thing to do.
This is the task of market makers.
This thread is not about forex, and providing liquidity by market makers is another topic.
And I don't mean forex, there are market makers on all exchanges (a specialist on the NYSE and AMEX). And narrowing the spread to the balance sheet level is one of their main sources of income.
And what is the subject of their liquidity provision, if it is not a secret?
And I don't mean forex, there are market makers on all exchanges (specialist on NYSE and AMEX). And narrowing the spread to the balance sheet level is one of their main sources of income.
And what is the subject of their liquidity provision, if it is not a secret?
Not a secret, rather a blank spot. Tell me as an expert. If they are providing liquidity at their own expense, then mathematically it must be working (narrowing the spread essentially artificially) at a loss
Specifically interested in what rules they have to provide liquidity