Weight of money

Discussion in 'Newbie Questions' started by lucacrebbe, Dec 25, 2017.

  1. lucacrebbe

    lucacrebbe Trader

    Hello a nooby question about trading

    Let's make it simple

    Let's suppose the current price in an market (any market , it could be stocks, cripto, forex.) is at 2,20$

    Imagine there are a 3 people that want to BUY at 2,30 $ and there is a lot of money that want to be matched at 2,30$ (3 millions in total)

    Let's suppose the lowest price the sellers want to sell is 2,40$

    Let' s immagine there is less money at buy livel 2,29$ (1 million)

    What will happen?

    will the price go immediatley to 2,30 $?

    If you could explain this mechanism to a noob.
  2. Enivid

    Enivid Administrator Staff Member

    If these are the limit orders, and the buyers are sending market orders with any slippage tolerated, then the first 1 million to get to the liquidity will execute at $2.29, the remaining two - at $2,40. The Last price will get updated to $2.40.

    If buyers are using pending stop orders to enter the market, no trading will take place as no prices are matched.
  3. Lesiro

    Lesiro Trader

    If the buyer and seller have placed fixed price order, the trade would not be executed. Some other seller/buyer would have to enter the market to bridge this gap

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