Randomness of price values - page 2
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The price will not rise sharply, but the spread will widen sharply ;)
I mean very large volumes to buy) and work with those better dealers who have a fixed spread)
Wouldn't there be slippage with high volume?
I brought it up because either I don't understand something or there is some secret in the market. Here are my thoughts. It is well known that intraday processes are very chaotic (no need to say it, just look at one- or five-minute charts). And the main players that move the price work at the level of ticks... It begs the question:
What are they doing there?
Let us make a thought experiment. Let us imagine a bank trader working in the Forex market. Let's say that there are no spreads and no commissions in the interbank market - the conditions would seem to be heavenly by our standards, but there is one "but". If the level where he works is chaotic, the price is unpredictable, which means that the probability of winning is equal to the probability of losing, and the profit/loss will be randomly distributed among all players. So what are they doing there? Are the people at the big offices so stupid that they would stoop to the level of dubious gambling?
But that's not all. Let's return to our trader. A trader is a trader, he is obliged to make trading decisions. But if the price is unpredictable, on what basis will he make these decisions? Where are his reference points? In an ideal chaos there should be no reference points. What does a trader use as a guide when making trading decisions? Moon phases or does he trade "from a light"? Does anyone have any ideas?
NorthAlec:
Let us do a mental experiment. Imagine a bank trader who works in the Forex market. .................So what do they do there? .................
Since the experiment is proposed as a mental one, it's not a bad idea to fantasize. Versions-variants:
1. arbitrate.
2. Using insider information (banks receive conversion orders), trade sideways against the client.
3. looking for points of unstable equilibrium (ready for bifurcation), and organise the loss of equilibrium with relatively small amounts, causing large movements, which are accordingly cashed in.
4. They support chaotic-martingale (with microbids), achieving higher liquidity, and taking profit from commissions and spreads.
5, 25, 88. ........, etc.
Those wishing to continue the list can do so.
Since the experiment is proposed as a mental one, it's not a bad idea to fantasise as well. Versions:
1. arbitrate.
2. Using insider information (banks receive conversion orders), trade sideways against the client.
3. looking for points of unstable equilibrium (ready for bifurcation), and organise the loss of equilibrium with relatively small amounts, causing large movements, which are accordingly cashed in.
4. They support chaotic-martingale (with microbids), achieving higher liquidity, and getting from commissions and spreads.
5, 25, 88. ........, etc.
Those wishing to continue the list can do so.
Cases can be found. But trading is done on ticks, which means there is almost no time to think. A trader has to decide fast! You can compare it with a racing driver, who is said to have 10 milliseconds to think :)
NorthAlec:
But trading is done on ticks, which means there is hardly any time to think about it.
Cases can be found. But trading is done on ticks, which means there is hardly any time to think about it.
Where does this data come from?
From the banks, dear man, from the banks. Have you never seen the ticking charts?
From the banks, dear man, from the banks. Have you never seen tick charts?
It's a great folly to work with tick data - pipsing is utopian and unproductive - the quieter you ride, the healthier you will be...