Lets move the markets.

Discussion in 'Forex' started by thn5625, Dec 30, 2005.

  1. thn5625


    I been amusing myself with this idea... What would happen if there were a coordinated effort to overflow a certain cross?

    Someone gives a signal and for the next day or two we all buy that cross. Wouldnt that disrupt markets? For example, 1000 traders buy Eur/usd at 100K each. That would be 100,000,000. Im sure we can do this.

    Sort of what institutional traders do with all their money power.

    comments anyone?
  2. Everyone participating would be pissing on themselves taking a 10pip gain. You gotta be kidding me.
  3. It's not remotely illegal in fx.
  4. thn5625


    Thanks for the post.

    Obviously its not for monetary gain. Just wondering what would happen. Honestly, in the forex markets central banks flood the market with their currency.

    This is an open discussion, not a conspiracy to manipulate the markets. Besides who would commit a conspiracy for everyone to see? Just wouldnt make sense.

    Also, when is it a crime to openly discuss something. There is freedom of speech. I dont think I will be hung for something like this. That only happens in certain communist countries.

  5. thn5625


    Ok, ultimately I want to find out if it would be beneficial to be able to move the forex market and why?

    If you could move the forex market, how much money would it take and how many pips would it take? Since Fx is so large would it even be possible. I heard somewhere that even central banks can only move the market a hundred pips or so.

    As far as I observe, information cause price action. What is the underlying reasons prices move?
  6. HoCk


    the problem is you have to think about where money comes from...if the currency is really and truly not in a place the US wants it, it can just "create" more money and quickly correct the market...hence you'd ultimately get destroyed, since your not making the rules and pulling the strings...it doesn't matter how much money you think you have, they got more.
  7. thn5625


    In the long term I see where you are coming b/c they can create money. However, creating money would have its disadvantages. The biggest would be the central bank's concern of inflation and its effects on interest rates and ultimately the economy.
    Also, central banks usually create money slowly unless there were an emergency so a quick response would be not likely.
    Additionally, the effect of creating more money would be slow since there is a time lag from 1 week to even a year b/c the tools of creating money isnt whats populary thought of as printing money but by issuing more US bonds.
    In the short term, and hypothetically you would probably need an ungodly amount of money to even move it a hundred of pips but didnt George Soros do this. Correct me if I am wrong
  8. 5 pips, I'm not that greedy. :D

  9. The problem is, in FX the daily trading is about 1.7 TRILLION per day.

    Your strategy would move the market for about 5 minutes or less.

    It would likely create a spike in whatever cross you were attempting to manipulate and then the arbs on the other pairs would kill you.
  10. thn5625


    What would the strategy be for arbs on the other pairs. Would it create a temporary arbitrage situation which would close up immediately?
    #10     Dec 31, 2005