Are there drawbacks to working with such a liquid market?

Discussion in 'Forex Trading' started by forextraderpro, Mar 20, 2008.

  1. Are there drawbacks to working with such a liquid market?
  2. Liquid market?

    If you are trading spot your market really isn't liquid at all. You're trading against your broker (bucketing), which has at most $50 million.
    No spot broker trades in the real Interbank Market, period.

    If you're trading FX futures, yes the major pairs are quite liquid.
  3. Diesis


    And so, the next question should be:
    "And how can I trade in the real Interbank Market" ?
  4. lol, you're too funny crgarcia, don't you realize marketmakers hedge exposure in the interbank market!

    As for the OP's question, why would ample liquidity be any problem if it means your orders get filled?
  5. crgarcia:

    All you do is bashing the spot forex market in favour of the futures market. Why don't you just open your own topic, post your experiences and leave all unrelated threads alone.

    Some like spot, some like futures; don't make everything into an argument about that.

    ontopic: high liquidity often means high volatility; maybe that would be a drawback for some.
  6. Diesis


    I'm a newbie, but I think that one think is true in crgarcia post: some of the operations you do with a broker are "bucketing".
    A broker have to find a counterpart for your transaction, and the first counterpart that he searches is among its customers. This couls be see as bucketing.
    If he didn't find any among it's customers, the brokers send the order to the market.
    Am I wrong ?
  7. As cabletrader pointed out, if your orders are getting filled what difference does it make?

    I could care less whether my orders go to the interbank market or the local Tom Thumb. As long as they get filled when and where I want, I'm a happy trader.
  8. RedDuke


    This is true. I have written this info on many threads in the past.

  9. Of course it's not true, what, you think marketmakers are stupid enough to keep everything in-house exposing themselves to unlimited risk, lol yeah right! Who do you think provides liquidity to the marketmaker, the local Tom Thumb (lol, good one bugscoe!)

    The amount of misinformation on forums is just amazing, most of this stuff is common sense, a commodity in great demand but in short supply it seems (shame it's not a tradeable instrument :D )
  10. Think about it for a while then you could probably answer that question yourself :p
    #10     Mar 22, 2008