Weight of money

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

  1. lucacrebbe

    lucacrebbe Trader

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    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

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    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

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    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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