Liquidity

astondan said:
I understand that dealing with a bucketshop has little to do with real market liquidity, hence my initial question regarding ECN's and should i achieve that level, what does it actually 'look' like (phsyco babble aside).
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Dukascopy operate as an ECN aggregator. From my own investigations they seem to be an excellent setup. Set yourself up with a free demo account and have a play around. You'll need $50k to open a live acct though.
 
Directional said:
Dukascopy operate as an ECN aggregator. From my own investigations they seem to be an excellent setup. Set yourself up with a free demo account and have a play around. You'll need $50k to open a live acct though.
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Thanks Directional. Their platform is excellent on demo. I've been running it alongside for a week or so. They also used to have some interesting TA stuff (depth of market graphs etc, although they seem to have stopped this now). I also like the fact you have to have some coin to open an account. :cheesy:
 
heres liquidity.. lol
 

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cr6196 said:
i have a question about liquidity that i could perhaps ask here...what is the difference in liquidity at lunch time on cable, say between 1-2? does it differ greatly from say 10 in the morning? i mean can price be pushed about more easily...weird question i know but was just wondering...
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You talking 1pm - 2pm uk time? Remember you have US data releases usually that time. So really depends what's going on...
 
cuotes said:
Just in order to add a little more detail, I'd dare to say that Dark Pools Liquidity's world is an interesting one :)

A tiny intro from investopedia: What Does Dark Pool Liquidity Mean?

A slang term that refers to the trading volume created from institutional orders, which are unavailable to the public. The bulk of dark pool liquidity is represented by block trades facilitated away from the central exchanges

Also referred to as the "upstairs market", or "dark liquidity", or just "dark pool."

The dark pool gets its name because details of these trades are concealed from the public, clouding the transactions like murky water. Some traders that use a strategy based on liquidity feel that dark pool liquidity should be publicized.

If interested in this fascinating ( to me ) thing, you can start from here:
Dark pools of liquidity - Wikipedia, the free encyclopedia
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Well as this is primarily a discussion about FX liquidity, you need to bear in mind the fact that the definitions of dark pool liquidity that you're talking about are based on equity market dynamics. Not to say the principle doesn't translate at al to FX, but it's definitely a market that behaves differently.

Just take a look down the bottom of the article to see the sorts of names they tout as being the driving forces - instinet etc. Equities.
 
foredog said:
funnily enough no volume in the Nasdaq futures at 0532 Uk time when both London and New York, the most likely to trade, are still asleep.
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The NQ is a stock index futures contract. Hardly surprising that it has most volume when the underlying market is open.
 
Hi GJ,
You mentioned that an order af 20M wouldn't usually move EURUSD 'much'. Could you expand on that a little, and when it applies? I.e. European session, Euro/NY session, NY only etc.

I would imagine that once London/Europe ahs gone home for the day, a 20M order has much greater relevance.

Example: With my ECN, i see an opportunity at 2.30pm on EURUSD and enter at market for 20M - surely that would not influence price at all at that time, would it?

Thanks
Dan
 
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well ok so we basically have two questions here I'm guessing...

i) How much would said order influence future price direction (i.e. for the next few hours) and

ii) Shorter term, how much extra slippage could I expect to see getting that larger size away.

In terms of slippage, during london hours thats not a hard amount to cover in eurusd, but it does get a touch thinner once london go home. Still not at all a size to flap about though.

In terms of whether it would influence direction, 20m in majors not at all really. Akin to the wash from a small speedboat influencing the course of a supertanker.
 
GammaJammer said:
You talking 1pm - 2pm uk time? Remember you have US data releases usually that time. So really depends what's going on...
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Yeah i was just wondering basically how much liquidity varies throughout the day? sometimes it seems like there is only a few hours of solid movement...
 
remember that the relationship between liquidity and what you call movement isn't necessarily a fixed correlation.....
 
GammaJammer said:
Well as this is primarily a discussion about FX liquidity, you need to bear in mind the fact that the definitions of dark pool liquidity that you're talking about are based on equity market dynamics. Not to say the principle doesn't translate at al to FX, but it's definitely a market that behaves differently.
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Absolutely.
Since I don't play in the fx garden, I've overlooked it.

Thanks for the correction. Not only for me, but for other readers that could be confused :eek:
 
GammaJammer said:
remember that the relationship between liquidity and what you call movement isn't necessarily a fixed correlation.....
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do you mean that liquidity isn't linked to "movement"? or that it isn't always linked to movement? i think what i was saying that sometimes price moves out of proportion and i always thought it was due to a lack of liquidity...if that makes sense? so i was wondering how much liquidity actually varied throughout the day...hmmm this is all slightly more complicated than i thought...
 
he means no matter what the markets will reach there final desitnation...

you could buy 20 mil in a thin market and move the price... i will take the other side of this market and short 10x that amount again once the market has moved higher
 
Directional said:
Dukascopy operate as an ECN aggregator. From my own investigations they seem to be an excellent setup. Set yourself up with a free demo account and have a play around. You'll need $50k to open a live acct though.
Click to expand...
I dont think Dukascopy is a real preofessional ECN , look at their prices it moves by 0.5 pip not 0.1 pip , maybe they show level 2 data from few normal marketmakers , when we say professional forex ECN we mean tier 1 banks level 2 feed , maybe GJ could give us more information here .
 
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