Simulate the situation. If 1,000 people were forced to trade amongst themselves, how would the graph behave? - page 3
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Since the asset is new, no one has it
a man puts an order in the market: I want to buy an asset at that price. another man sells it to him.
then they close their positions after some time (making opposite deals, either between themselves or with other market participants).
I don't touch crypto at all, I have no idea who is moving what there. Currency, oil. I keep an eye on it. And how do I follow it, at the tick level.
You should be more careful. The author's financial instrument is virtual.
why? the market is there. whoever wants to put in an order can do so.
yes, if there is a benefit algorithm, and under certain conditions. For example, the asset is boxes, the currency is roubles. Each participant has 100 boxes and 100 roubles. Each participant understands that the value of 1 box = 1 rouble. He will put an order into the glass to buy at 0.5 roubles or sell at 2 roubles. He understands that buying boxes at 0.5 roubles is generally profitable, but why not to sell at 2 roubles would be profitable for him, other operations are not profitable for him. Every participant will make such bids and no one in the market will buy/sell, because there is no profit in it.
If transactions are random, it's OK or if the issuer of the boxes is the same.
It should be taken into account that this model does not take into account the peculiarities of markets.
The currency market - there is an issue of both assets, one more than the other, the number of participants is stable because the whole population is involved in the currency exchange process in one way or another
The stock market - there is no issue of an asset but there is an issue of currency for which the share is traded. That is, the number of participants is not fixed at $100 but is periodically increased and the value of money goes down. The number of participants fluctuates and the market lives on the entry of new participants
The market of raw materials - raw materials are consumed and there is an emission, the quantity of the asset decreases (because of the consumption) and then it is replenished. There is a constant demand, its value fluctuates. Plus there is the issue of currency, which depreciates and the price of the asset rises, plus improved technologies for the extraction of raw materials, which makes them cheaper. It turns out to be the most difficult market.
Cryptocurrency market - there is no demand for practical use, as in the case of currency, it is purely a speculative market, there is a constant issue of the asset.
What matters is the ideal market. how the crowd behaves in it.
I don't touch crypto at all, I have no idea who is moving what there. Currency, oil. I keep an eye on it. And how do I follow it, at the tick level.
I have no idea who is moving the currencies, currencies, oil, and that's what I'm watching, and I do at tick level.
the cryptocurrency market - there is no demand for practical use, as in the case of currency, it is purely a speculative market, there is a constant issue of the asset.
The cryptocurrency market is ideal. only if there was no issuance.
imagine such an experiment.
They decided to do a study. They gave out $100 each to a thousand people. they created their own broker, installed an exchange terminal and told everyone: "start trading".
You could put orders in the market. You could open deals on the market.
(financial instrument - virtual)
How do you think a chart will behave in such a study?
And how will it end?
Without market maker(s) there will be no market, so the chart will be determined by its algorithm.
Well, these are additional elements.
We are interested in the ideal market. how the crowd behaves in it.
I think that with an infinite number of participants and with random trades the graph will have the same shape at each run. I would like to check this, or prove it mathematically of course.
you need to be more careful, the author's financial instrument is virtual
For everyone sitting at the monitors, what they buy and sell is also essentially something virtual.
The point is something else. People like us come to the market not to trade with each other but to have their money robbed.
Only they do not know about it. You need money to make a trick in a cup or a deal, and the crowd of a hundred each
don't have it. If someone turns out to be lucky and manages to squeeze out money, with the right approach they will continue to squeeze out.