Understanding what happens when dropping large orders into a market?

[Brovashift]

Hi all,

A few trades this week have moved against me when antcipating a direction and dropping e.g. £100 stake into the market which got me thinking what actually happens when other people or algorithums see this type of activity.

I know £100 isn't massive but for these trades in particular, even though it wasn't more than the money waiting, it probably was one of the bigger single orders entering the market at that particular moment, and so I imagine stood out to more experienced eyes or automation.

An example of one of these trades was price stuck around 4.0 for several minutes on a favourite, looking very indecisive, and so waited for some price movement on the 2nd fav. and time/liquidity to reach optimum levels. Seeing the 2nd fav start to move higher I anticipated the price to break lower on the fav, and so dropped £100 @3.95. The nano second the order hit the market it was taken with several hundred more waiting above my entry, and price quickly moved to @4.5. I initially thought its just someone on the other side dropping a larger order in at the same time with the opposing view. However, as this has happened a few times now Im starting to think maybe its not just a coincidence.
Around 2mins before the off, backing came for the fav and price broke 4.0 as I initially thought it would, and was able to get a second crack at it which enabled me the hedge for a small profit.

So can someone please explain what might be happening here? Is it human intervention or more likely to be automation... or both? Are they seeing a larger than avg order being dumped into the market and immediately taking a larger counter order to take out yours, and other waiting orders in the opposit direction, with the aim of profiting from traders panic exits/awating stop orders?
I guess this is also why its always better to scale in and out of trade, undetected.

TIA

[Tetras]

I would say it's more likely that you were just 'unlucky', in regards to money arriving or other movements. I don't think someone (bot or not) would dump enough to move the market, just to grab a few £ from your £100. Unless you were trading on a very thin market, or one with big clashes.

[alexmr2]

Hi all,

A few trades this week have moved against me when antcipating a direction and dropping e.g. £100 stake into the market which got me thinking what actually happens when other people or algorithums see this type of activity.

I know £100 isn't massive but for these trades in particular, even though it wasn't more than the money waiting, it probably was one of the bigger single orders entering the market at that particular moment, and so I imagine stood out to more experienced eyes or automation.

An example of one of these trades was price stuck around 4.0 for several minutes on a favourite, looking very indecisive, and so waited for some price movement on the 2nd fav. and time/liquidity to reach optimum levels. Seeing the 2nd fav start to move higher I anticipated the price to break lower on the fav, and so dropped £100 @3.95. The nano second the order hit the market it was taken with several hundred more waiting above my entry, and price quickly moved to @4.5. I initially thought its just someone on the other side dropping a larger order in at the same time with the opposing view. However, as this has happened a few times now Im starting to think maybe its not just a coincidence.
Around 2mins before the off, backing came for the fav and price broke 4.0 as I initially thought it would, and was able to get a second crack at it which enabled me the hedge for a small profit.

So can someone please explain what might be happening here? Is it human intervention or more likely to be automation... or both? Are they seeing a larger than avg order being dumped into the market and immediately taking a larger counter order to take out yours, and other waiting orders in the opposit direction, with the aim of profiting from traders panic exits/awating stop orders?
I guess this is also why its always better to scale in and out of trade, undetected.

TIA

I have often wondered the same but doubt that someone is out looking for a £100 stake in a quality market to push the price against it hoping for it to be a trader that is going to close their position for the chance of a few quid profit. If it was a £1k stake or a very low liqudity market then maybe as I know some traders look for big stakers. It is still never guaranteed that it is someone who can be exploited though, it could just be a bookie hedging their position for example.

£100 is too much to be staking on the back side at 3.95 as a newbie IMO. I believe that the most likely explanation is that when we overstake we get paranoid because those red ticks hurt a lot more (especially backing at a crossover), which leads to trading from a mindset of fear more than logic when really the market is just doing its thing. For that type of trade you would either have to be draconian on your stoploss, wait to take a better position or confident that there is going to be a big swing or no retracement.

Would be interested if anyone knew if there are bots capable of this but if that was the case I'm sure there would be a way of exploiting them.

If you really wanted to put this theory to the test you could go in practice mode and see if the same thing happens

[decomez6]

when really the market is just doing its thing.

Would be interested if anyone knew if there are bots capable of this but if that was the case I'm sure there would be a way of exploiting them.

The market doing its own thing ? Good question.

Xmatching ?
BF book% algorithm?
BF Market makers?
BF machine Learning Algo?
OR
just traders / Trading bots competing against each other and BF playing the role of a referee?

Sounds like a conspiracy theory and most likely will never be proven.
Check out this thread https://forum.betangel.com/viewtopic.p ... &t=12119

My personal experience is a mix bag .
You have situations where the market is stuck in a loop , just for a slight moment , a small window of opportunity E.g when markets reopen after a photo finish OR when there is so much money to match at very low odds . you can sneak in some few orders.
If you are in the right place at the right time .

On the other hand , I have questions on how the BF algo chooses which orders to fill and which ones to leave out.
E.g. I have two IN-running bots doing exactly the same thing , only difference is one is Laying and the other one is Backing . when you set the bots to accept the best available market price , BF algo will prioritise low odds for the backing bot and high odds for the laying bot . Its almost like a rule that never allows you to draw the best scenario , but readily accept your bets when in they show no long term value.
I ask myself If the above case was just a random outcome , so out of curiosity I set the Backing bot to back at 1.01 and the Laying at 1000. Guess what ?
The leading horse will not accept my laying order when it trades below 2.0 but my backing bot will gladly take the extremely low odds. How does this happen ? even when bots fire exactly at the same time and are conditioned exactly the same way .

I guess it’s all randomly skewed towards my long term loss and against my long term profit.
But again, what about all those other cases where bots go haywire causing all kinds of FAT fingers.

[jamesg46]