The super tanker of markets

Can we move the market? Possibly, certain markets. But we want to trade a market that has unusually high liquidity. In other words, the ability to buy and sell an asset easily and quickly.

We trade major currency pairings for this reason. But how big is the currency pairing that we trade, and can we influence it a bit?

If we consider the market we trade as the most prominent supertanker – the one that is more than four football pitches set end to end – then to move this supertanker the retail trader is as if spitting (horrible habit) at the hull.

Ah, but now we are a professional trader surely we have more influence at the level we trade. Yes, we do, we currently don’t spit too often, we have graduated to a feather duster.

To move our chosen currency pairing market, (Trillions of dollars are traded daily, particularly during the period of the Frankfurt, London and New York trade times) there are probably millions of spitters, many thousand feather duster types and everything in between right up to dozens of tugboats.

The tugs, in this analogy, represent the financial institutions – banks, pension funds, big hedge funds and the like. A few tugs need to push or pull in the same direction to move the market.

Our job is to determine, before hand, which way.

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