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Hey Matt!
Thanks for your reply and I'll try to keep up!
Glad you've answered and mentioned some things that I have questions about!
Wouldn't you mind my asking ?
1. "Fake orders".
I am agree with you on requirements that traders have to meet to place their money at any exchange. These orders are definitely real and money that stands behind them is real. I use the term "fake" with slightly different meaning and this is it: "fake orders" are never intended to be triggered. People (or algorithms) that set them are "faking it". These orders are being put into market to add liquidity to the market, to make it look more thicker and (of course) to trick some traders into thinking that there is liquidity on some levels (it IS there for now really) but this liquidity is never intended to be triggered (not yet). And when price gets closer to those bulks of orders they get cancelled just 1-2 ticks off them. Pulling /Stacking column on DOM shows how in 1-2 seconds these places get emptied by pulling away all the orders that were sitting there. Also, as you said, the converse is true -bulks of orders can attract participants to doing business in those areas.
I think that's a little different topic I am beginning to dig into right now (how Bids and Asks work in our DOMs and how you need to interpret information you see) and never-ending changing / pulling & stacking is an absolutely normal process for any exchange but I just wanted to point out on specific places in order book where, as people might think, there is liquidity, but essentially, there is none. Well, you'll never know... And I accept that.
2. Why is 6E so thin?
This is EXACTLY that bothers me so much. How come that futures contracts of the biggest OTC currency traded market of the World has so pathetic numbers of contracts in DOM? Whilst ES has a few thousand contracts on each tick we (6E futures) have only miserable tens of contracts at each level (plus a few tens when NY gets open) How is it even possible to look so small? Does that really mean that futures traders are not really interested in this market due to their experience and knowledge? Does that mean that they find it difficult to trade 6E due to ambiguity of this product? The product that only follows blindly FX spot market.
Can you help answer these questions from other members on NexusFi?
I don't disagree with your first point at all, I was just emphasizing that 'spoof' orders are still worth being aware of because the people doing them need a large account to be able to place them and risk them being hit, and size matters.
I haven't looked at currencies for ages. The 6E certainly looks thin considering the Euro is the most traded product. You say it is an hour before the UK open which is when I believe the European markets open, so not out of hours.
The CME did start to introduce an extra decimal place on price for a lot of their currencies, similar to what the spot forex markets have had for ages. So the Euro used to have one tick as from 1.1142 - 1.1143. Now that have halved that with it being two ticks, 1.11420 - 1.11425 - 1.11430. I assume that reduced the size at each level. I think the Euro was the first one they did though and I thought it was a year or two back. I'm afraid I am not much help on that.
Edit:
And there is the E7 mini Euro which I had forgotten about. Though looking at the volume right now, midday Eastern time, 93,000 contracts volume in the 6E and 2,000 in the E7, I guess all the Euro traders didn't go over there
You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden