Why does the price move? The answer is here!!! - page 19
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OK, bulls/bears aside, "Bingo-bongo mother, everything has changed", now we have chicken/egg trends(so much for the word).
Maybe so).Didn't think I added any critters to the zoo).
Good night! It's nice to communicate with adequate personalities!
So. Maybe this is a stupid question, but I still do not understand the nature of price movements in the foreign exchange market, i.e. how many lots should be sold, for example, for the price to change by 1 pip in a currency pair. Or this change may be somehow reflected in the imbalance of other parameters.
After all, if someone sells, someone else buys his lot, and the reality is that the two demands are actually mutually absorbed, and hence the difference between supply and demand is equalized.
WHY then there is a price movement, since the number of purchases is always equal to the number of sales (it's not like the broker himself is buying and selling).
Logically , the quotes that are inside the spread are overlapped by the purchases/sales that have already taken place.
And if now someone wants to buy, the broker must find a counterparty. And apparently he will search only through stop orders (because the broker will not work at a loss and buy for me the currency at a higher cost than I want, that is at the limit order). Then what price will appear on the terminal - mine, his, or somewhere in between? So my buying moves the price downwards, not upwards. I am completely confused and confused!
i.e., how many currencies should be bought/sold for a 1 pip movement? You can not comment on it, just give me a link at least...
Very grateful in advance to everyone who responded to the request.
Otherwise I come to the conclusion that you, in fact professional programmers, write EAs and indicators simply DO NOT UNDERSTAND the laws and causes of market movement (what then is actually being written?)
Maybe the answer is simple, what are asc and bid how are they formed?
why is the ask always the lowest best price offered on the selllimit market and the bid the highest best price offered bylimit.....
and who supplies this liquidity in the form of limit orders to the market?
So there you go. Sorry for such a perhaps silly question, but I still can't understand the nature of price movements in the foreign exchange market. In other words, how many lots should be sold, for example, for the price to change by 1 pip in some currency pair. Or this change may be somehow reflected in the imbalance of other parameters.
After all, if someone sells, someone else buys his lot, and the reality is that the two demands are actually mutually absorbed, and hence the difference between supply and demand is equalized.
WHY then is there a price movement, since the number of purchases always equals the number of sales (it's not like the broker himself is buying and selling).
Logically , the quotes that are inside the spread are overlapped by the purchases/sales that have already taken place.
And if now someone wants to buy, the broker must find a counterparty. And apparently he will search only through stop orders (because the broker will not work at a loss and buy for me the currency at a higher cost than I want, that is at the limit order). This means that the price I would buy would move down towards my counterparty. Then what price will appear in the terminal - mine, his, or somewhere in between? So my buying moves the price downwards, not upwards. I am confused and confused!
i.e., how many currencies should be bought/sold for a 1 pip movement? You can not comment on it, just give me a link at least...
Very grateful in advance to everyone who responded to the request.
Otherwise I come to the conclusion that you, in fact, professional programmers, write EAs and indicators simply DO NOT UNDERSTAND the laws and causes of market movements (then what is actually being written?)
To understand this question, you must understand that the price is discrete and consists of 3 components: the best bid (Ask), the best ask (Bid), the last price of a completed transaction (Last ). The difference between the best offer price and the best bid price is called the exchange spread. To display these prices, the best way is to use a market tumbler:
The number of contracts you are willing to buy are in the "Buy" column, opposite these volumes is the price at which you can sell these volumes. The number of contracts that you can buy are in the column "Sell", it corresponds to the price at which these volumes can be sold to you.
Consider the situation. Let's assume that you need to buy 100 RTS contracts at the market, (i.e. at the current best price). Obviously, the best price for you will be the cheapest (buy as cheap as possible). From the whole range of offers, you will obviously choose an offer price of 187730 (it is always the first one in the "for sale" column) and want to buy at it. In fact, you would be willing to buy at a lower price, for example 187725, but there are currently no sellers who are willing to sell at this price (the For Sale column above 187730 is empty). Conversely, it is not a good idea to buy at 187735 or 187740, for example, when you can buy at 187730.
So you buy at 187730. However, your supply is limited to only 1 contract (the volume in the Sell column is 1 contract), which means you only buy 1 contract and 99 must be bought from other sellers. No one else wants to sell at 187730, so your next best offer is 187735. You also buy all the contracts at this price, i.e. 5 contracts. The next best offer is 187740 and so on. As a result, you will buy at the market price:
1 contract at 187730
5 contracts at 187735
6 contracts at 187740
16 contracts at 187745
16 contracts at 187750
9 contracts 1877755
48 contracts at 187760.
It turns out that your actions have moved the price 30 pips higher. Your average entry price is now about 187753. This is how market or stop orders work, while limit orders, on the contrary, only buy at the requested price or better. For example, if you place a limit order to buy at 187730, it means that you will buy if the best entry price is no lower than 187730.
Because with low volumes it is quite easy to collect all the volumes of supply or demand in a market tumbler, making the price very unstable and steeple-like, market makers provide the market with artificial supply and demand near the current price. You can see in the tumbler, for example, that a large volume of demand is concentrated at the price of 187,700. The price won't be able to go lower until that volume is satisfied. It is most likely the market makers. They are trying to keep the price from falling uncontrollably, which is probably happening at the moment.
Following this logic, if you place a limit order to buy at 187700 or even more so at 185000, you will certainly not be left short. However, that is not the case. Traders are competing with each other. That means that your demand to buy at 185,000 is much less competitive than the demand of your competitors (buyers like you) to buy at 187700 and the demand at 187730 will be the most competitive and therefore will be satisfied faster. That is, someone will surely agree to moderate their appetite in order to take away your opportunity to buy at a lower price. And to take away your favourable purchase price of e.g. 187,700 is possible if you buy earlier at 187730. This fight unfolds on a microsecond scale, making the market efficient, liquid and transparent.
In order to understand this, it is necessary to understand that the price is discrete and consists of 3 components: best bid price (Ask), best ask price (Bid), last price of a completed trade (Last ). The difference between the best offer price and the best bid price is called the exchange spread. The best way to display these prices is to use a tumbler:
The number of contracts that you are ready to buy are in the "Buy" column, opposite to these volumes is the price at which these volumes can be sold to you. The quantity of contracts which you can buy are in a column "Sell", it corresponds to the price at which these volumes can be sold to you.
Consider the situation. Let's assume that you need to buy 100 RTS contracts at the market, (i.e. at the current best price). Obviously, the best price for you will be the cheapest (buy as cheap as possible). From the whole range of offers, you will obviously choose an offer price of 187730 (it is always the first one in the "for sale" column) and want to buy at it. In fact, you would be willing to buy at a lower price, for example 187725, but there are currently no sellers who are willing to sell at this price (the For Sale column above 187730 is empty). Conversely, it is not a good idea to buy at 187735 or 187740, for example, when you can buy at 187730.
So you buy at 187730. However, your supply is limited to only 1 contract (the volume in the Sell column is 1 contract), i.e. you only buy 1 contract and 99 must be bought from other sellers. No one else wants to sell at 187730, so your next best offer is 187735. You also buy all the contracts at this price, i.e. 5 contracts. The next best offer is 187740 and so on. As a result, you will buy at the market price:
1 contract at 187730
5 contracts at 187735
6 contracts at 187740
16 contracts at 187745
16 contracts at 187750
9 contracts 1877755
48 contracts at 187760.
It turns out that your actions have moved the price 30 pips higher. Your average entry price is now about 187753. This is how market or stop orders work, while limit orders, on the contrary, only buy at the requested price or better. For example, if you place a limit order to buy at 187730, it means that you will buy if the best entry price is no lower than 187730.
Because with low volumes it is quite easy to collect all the volumes of supply or demand in a tumbler, making the price very unstable and steeple-like, market makers provide the market with artificial supply and demand near the current price. You can see in the tumbler, for example, that a large volume of demand is concentrated at the price of 187,700. The price won't be able to go lower until that volume is satisfied. It is most likely the market makers. They are trying to keep the price from falling uncontrollably, which is probably happening at the moment.
Following this logic, if you place a limit order to buy at 187700 or even more so at 185000, you will certainly not be left short. However, that is not the case. Traders are competing with each other. That means that your demand to buy at 185,000 is far less competitive than the demand of your competitors (buyers like you) to buy at 187700 and the demand at 187730 will be the most competitive and therefore will be satisfied faster. That is, someone will surely agree to moderate their appetite in order to take away your opportunity to buy at a lower price. And to take away your favourable purchase price of e.g. 187,700 is possible if you buy earlier at 187730. This fight unfolds on a microsecond scale, making the market efficient, liquid and transparent.
You couldn't have said it better, good. )
ZS: So all the informers saying that 52% are now in shorts on the Eurodollar and only 48% are in longs, doesn't mean anything.
лучше не скажешь, гуд. )
ЗЫ: так что все информеры говорящие что вот сейчас 52% в шортах по евродоллару и лишь 48% в лонгах, ни о чем не говорят.
It's not that simple. Informers report a shift in the sentiment in a particular DC. I.e. the aggregate position of any group of participants will never be equal to zero, but will almost always be very close to zero. Simply 2% of shorts will be balanced by positions outside this ECN. By whom exactly is another question.
It's not that simple. Informers report a shift in the sentiment in a particular DC. I.e. the aggregate position of any group of participants will never be equal to zero, but will almost always be very close to zero. Simply 2% of shorts will be balanced by positions outside this ECN. By whom exactly - this is another question.
For example, if the price of a Short is higher than the price of a Short, then the price of a Short may be higher than the price of a Pending Short.
That everything is in balance is clear.
I don't mean that, but the informers show information on open positions, but not on pending positions, while it would be better to show information on open interest, rather than on what has already been executed.
The fact that everything is in balance is clear.