Can a limit order Move the Forex Market?

[PhoenixJ]

Can a limit order move the Forex market?
If so will it also impact the market before it's executed?
Please consider low to high-volume positions for this question.

 

[Polakandil]

If you trade on an ECN broker. The limit order price does not change, but the spread value may change when market liquidity is low, usually the spread will be wider because when market liquidity is low there are only a few buyers and sellers in the market, this causes the spread costs to widen thereby affecting orders. Limit orders are liquidated when the market is low liquidity, perhaps traders will see larger floating losses than usual.

 

[Fin_Trader]

Limit orders from big players can change the market. It is their triggering that causes the price to move sharply from these orders. We, as small traders, can only identify the tracks of such large players and trade in their direction.

 

[Lee.me]

Won't do much on pairs with high liquidity though.

 

[PhoenixJ]

If you trade on an ECN broker. The limit order price does not change, but the spread value may change when market liquidity is low, usually the spread will be wider because when market liquidity is low there are only a few buyers and sellers in the market, this causes the spread costs to widen thereby affecting orders. Limit orders are liquidated when the market is low liquidity, perhaps traders will see larger floating losses than usual.

Yeah and the thing about my question is that mostly I don't think it can effect a pair with high liquidity and on low liquidity there is that which you explained but even so, I think it's very reasonable to believe that they will effect in a way. I'm more concerned if they effect a pair before they are executed. I know it's a theory but it has good logic behind it.

 

[PhoenixJ]

Limit orders from big players can change the market. It is their triggering that causes the price to move sharply from these orders. We, as small traders, can only identify the tracks of such large players and trade in their direction.

Exactly! I completely agree with your statement, but the thing is, will the limit order affect the market before it is executed? For example, a limit order to act as a support or resistance level. This is completely theoretical. The thought just crossed my mind.

 

[PhoenixJ]

Won't do much on pairs with high liquidity though.

Yeah, but we have 2 different scenarios here. Pairs with low liquidity and the time when the market has low liquidity. For example, before the market closes and after its opening.

 

[Fin_Trader]

Exactly! I completely agree with your statement, but the thing is, will the limit order affect the market before it is executed? For example, a limit order to act as a support or resistance level. This is completely theoretical. The thought just crossed my mind.

I think that as long as such a limit order is not activated, it does not affect the price movement in any way. And it becomes a support or resistance level when it is fulfilled, that is, a major participant entered the market with a large lot. Then the price rebounds sharply and this level of support or resistance is formed.

 

[Polakandil]

I think that as long as such a limit order is not activated, it does not affect the price movement in any way. And it becomes a support or resistance level when it is fulfilled, that is, a major participant entered the market with a large lot. Then the price rebounds sharply and this level of support or resistance is formed.

Yes, I think that's right, as long as the limit order is not activated, it does not increase the trading volume in the liquidity pool, meaning it does not affect market changes, but if the limit order is active, it increases the volume in the liquidity pool and if the transaction volume is large it might affect market changes. Not only limit orders, stop loss also affects transaction volume.

 

[PhoenixJ]

Yeah, that's what I thought but I was wondering about other possibilities as well. Don't really think they could be true just random theories.

 

[PhoenixJ]

Yes, I think that's right, as long as the limit order is not activated, it does not increase the trading volume in the liquidity pool, meaning it does not affect market changes, but if the limit order is active, it increases the volume in the liquidity pool and if the transaction volume is large it might affect market changes. Not only limit orders, stop loss also affects transaction volume.

Very well put.