When selling a stock at market order, if you sell enough shares, price will drop alot depending on liquidity of the stock.How does it work with forex?l mean, you never see how many orders there are when say buying USD/JPY You just click a button and get filled instantly.How big of a size would you have to do before you didnt get filled instantly?Millions?Billions?It seems unreasonable to think that someone would come in to buy say 1000 lots (100 million dollars) of USD/JPY at 104.109 and get filled at EXACTLY that price for the whole order.Right?

Great question. When l first started trading Forex l had the same thought as you. At the time l was demo trading a Gain Capital account ( l was an extreme newbie at the time - & would never recommend Gain). l remember taking some very large orders & being impressed at how fast the orders were filled. However, l was trading a demo account & not real money plus Gain had an incentive to ''fill'' those fake orders instantly to give me the feeling that it would be the same trading real money. When l did open my first real account l set up at MB Trading. At MB they show liquidity, meaning they actually tell u how much demand there is at a given price. l quickly learned that there is a maximum to how large of an order u can place & how quickly it will get filled.

Now, keep in mind there r different types of brokers. The market makers (such as Gain, Oanda) create their own artificial market in which u trade & will set internal limits as to how large of an order they will fill. There r also ECN & STP Brokers which, essentially provide a link between u & the liquidity providers (buyers & sellers). When u place an order there will only be a specific amount of liquidity at the price u want. If ur order exceeds the liquidity than the broker will slip ur price & fill part at price & the rest where there is liquidity. Think of this like any other market. There is only a certain amount of supply/demand at a given price. If supply disappears than price will go up, if demand disappears than price will drop. Most traders prefer to trade ECN & STP Brokers because of this & so let me explain how to identify liquidity when trading with one of them.

Think of this like any other market. There is only a certain amount of supply/demand at a given price. If supply disappears than price will go up, if demand disappears than price will drop. How fast u get filled depends on a couple important factors. 1) what currency pair r u trading? You will be able to trade much larger orders with pairs such as the eur/usd & gbp/usd than u would with say the eur/cad. 2) What time of day r u attempting to place the order? There will obviously be less buyers/sellers between the close of New York & open of Asia when no markets r open than when both New York & London r open at the same time. 3) What capacity do the broker is liquidity sources have? Dukascopy for instance has the ability to fill much larger orders without slippage than MB Trading. To give u an idea, l have seen liquidity upwards of 50-60 million on the gbpusd & eurusd during peak market times at Dukascopy while MB was significantly less ( 5-10 million).