Retail traders typically do not use iceberg orders as they are designed to handle large volumes of trades, and retail traders generally deal with smaller order sizes.
Additionally, iceberg orders require access to advanced trading platforms and order types more commonly available to institutional investors or high-frequency traders.
However, some brokers or platforms may offer iceberg-like features for retail traders, where orders can be broken down into smaller portions to limit market impact.
However, retail traders tend to use more straightforward order types, such as market orders, limit orders, and stop orders, due to their ease of use and accessibility.
Identifying iceberg orders can be tricky, but there are some signs to look for.
- Unusual price movements with small, incremental trades might indicate a sizeable hidden order being executed.
- In the order book, you may notice a large order broken into smaller parts at the same price level, disappearing and reappearing without causing significant slippage.
- Another clue is the large bid/ask sizes that don’t fill quickly, suggesting hidden orders are being executed slowly.
Some traders use specialised tools to detect iceberg orders by analysing patterns in price and volume, but I don’t have experience with this.
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