Anatomy of big market participants. Part 2
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Thread: Anatomy of big market participants. Part 2

  1. #1
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    Anatomy of big market participants. Part 2

    Let’s continue thread about big market participants. The beginning is here

    Imagine yourself a large dealer from a bank, for example Citibank (that is considered to be one the largest market makers in the world).

    You come to your office in London’s City early in the morning, watch Asian newsfeeds and your working day starts. Suddenly you receive a call from your large institutional client – company that sells goods in United States for British Pounds.

    He says – «next week we need trillion of US dollar by price «X» – market trade now near this price – we plan to acquire company in US. Use our corporate account for buying power. Can you handle it? And keep it quiet».

    You immediately look at your positions and see, that you can sell some of your dollars, but still need to buy 700 million to purchase in the market.

    Yet, the market goes sideways and there are a few market makers there making the game, you understand – if you place your orders right now, market makers from UBS and other banks will immediately raise prices, and your will screw prices and your client’s order will be executed by bad price. You earned your reputation and high bonuses in City because «big bosses» know that they can rely on you – they can expect to get good price if you are in the business.

    You call your traders and tell them – «we have a big piece of cake here» - I want you to tease the market a bit – we need liquidity from sellers. Today we will have news announcement and I want you to sell some dollars to make the market believe that we are closing our positions and exiting our dollar position. They will also sell after that – and we will buy from them.

    You do this way, and later on you see some selling pressure – your traders buy portion of dollars from urgent sellers who later on start covering bringing you profit. But it’s not what you want – you haven’t accumulated your position yet. You see that aggressiveness grows in the market – you understand that if you will not cool those «hot heads», they will raise prices and drive the market higher, where you will be unable to buy at good price. That’s why you rapidly hid the bids with large volume and make price return back to the trading range.

    A few days after, you buy all pullbacks and order flows to the downside, and suddenly, you find that there is no more supply – there are too much sellers, you have almost accumulated your position. Yet you have 10% of your position left. You decide that you will not drive the market much and simply buy the rest of your position by higher prices from UBS dealer. It causes price movement of 20 ticks to the upside and suddenly all short sellers start to exit their shorts, aggressively hitting the offers.

    You see the breakout and see that your position grows – you were able to accumulate it by the good price. You receive a phone call from your client – «Good job! Always pleasure to make business with you»

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    This is very big, but i do not think that they can do all as there are rules to the market too. They have the big flow of liquidity really, and they are having their links with other and and big players too. But if it is a direct participation like this, there is no way that the market will not be unified. The big players like the citi bank can do and undo in the market, but it is the other counter trdaing that helps to absolves some flows.

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  3. #3
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    Read this thread and learn about it. To me it seems to me a little bit complicated. I am yet newbie and want to become satisfied with simple trading with simple method. After becoming expert I can think to go with the complicated trading. I am yet trying to use simple moving average, support and resistance and some other common indicators to understand forex market.

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    What this thread describes is how market price is influenced and manipulated by big market movers and participant, but i doubt if this can be of help to the retail small trader who certainly cant have easily access to such information. The small trader needs simple trading systems that they can easily understand and implement.

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    Quote Originally Posted by Value trader View Post
    Yet, the market goes sideways and there are a few market makers there making the game, you understand – if you place your orders right now, market makers from UBS and other banks will immediately raise prices, and your will screw prices and your client’s order will be executed by bad price. You earned your reputation and high bonuses in City because «big bosses» know that they can rely on you – they can expect to get good price if you are in the business.
    This is the right reason that every one behind is suggesting not to trade in the ranging market. One just need to stay concerned with his trading and always not to trade in the ranging market the reason is from there it can break to any direction and some thing worse can happen there. Just make your trading plan and there trader need to plan the same and in case of breakout trader need to plan his position and there he can earn handsome.

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    Quote Originally Posted by HAMEDFX View Post
    what the traders should be more concerned about is not who and who are the participants that are oin this business but rather how to make sense from the zig zag movement of the Forex market so that he will be able to know what exactly is he to do at every time that he sees any movement in the Forex market because we need to know how the market thinks that is the only way to make money from it.
    What you do not know is that; the market is not the trdaing alone, but how the market works too. This is one of the things that will give you inspiration later on, it is one of the reason that is motivating me not to place the reversal no matter what i am doing in the market. It is actually about the flow of the market that it trends always.

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  7. #7
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    We retail traders are like the small fish in the ocean of the big shark, this is a serious things of the trading. I am nor fearing about the forex with this, i am only looking at the way i can make more money wit the situation i am seeing about the market alone. This is what other traders are seeing about the forex too, it may be in different way also..

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    i think banks are the biggest power in the changing the forex market trend as they can change it in a huge way and moreover we can rarely predict their movement and so the difficulty we face while we are making orders in our account which makes it more difficult for us.

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    Many of us retail merchants are such as small fish inside ocean on the big shark, that is a serious things on the trading. I am nor fearing regarding the Forex with this, i am only investigating the way i could earn more income wit your situation, i are seeing regarding the market on your own. This is the other traders are generally seeing regarding the Forex also, it could possibly be in distinct way in addition.

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  10. #10
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    Learning is a life long process and we need to learn from our experience. One just need to stay concerned with his trading and always not to trade in the ranging market the reason is from there it can break to any direction and some thing worse can happen there. Just make your trading plan and there trader need to plan the same and in case of breakout trader need to plan his position and protect by using a good stop loss.

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