Been wondering how competition/practice account works. Let's say A and B are practice account traders and XYZ share is illiquid. A bought 100 XYZ shares at $3, what will happen if B wants to buy 100 XYZ shares at $4. How will the market price be reflected? Ultimately, are practice account traders part of market movers? hmm..
I'm not sure but I think you are talking about demo/paper trading accounts?
If that is the case: They do not influence the market. If you place your order at 4 and your bid is below the ask your order will sit there until a real trade at or below 4 is registered. Then you should have your order executed at the same price.
You are the only one who sees your bid as your order is not actually sent to an exchange.
hmm. the real confusion here is- at what price, what quantity the order will be filled? since practice account holder does not move the market, doesn't that mean they can only buy/sell at current market price; and the maximum quantity will be the quantity in real trading? If so, practice account holder can buy that quantity again and again?..since in actual market the order is not being filled at all.
If you have a practice account your simulated transactions - buys and sells - do not have any impact on real prices. If you try to trade illiquid stocks with that account, the results will be unrealistic in any case.
So you should use your simulation account with liquid instruments only.
Selamat datang di forum hari perdagangan Big Mike! -> If this is not correct, just guess what it means.
The following user says Thank You to Fat Tails for this post:
I do know what you meant fat tail haha. if practice account is not suitable for illiquid stocks, then am I correct if I say one can exploit it to win in a trading competition, by buying low and selling high virtually?