Iceberg orders: can retail traders really spot them?

[Shadow Trader]

An iceberg order shows only a small slice of its real size. A buyer wanting 50 million might display 2 million, and each time that slice is filled, another 2 million appears at the same price. The goal is to avoid signaling the full size to the market.

Retail traders on futures with proper order book data sometimes watch for these. The tell is a price level that keeps absorbing trades without the displayed size shrinking, or a level that refills quickly after each hit.

In spot forex, it's much harder. There's no consolidated tape, and what a retail broker shows is a filtered view. A large order from a bank is split among several providers, and the retail platform sees none of it directly.

What retail traders can observe is the effect. Price pushes against a level repeatedly, tick volume rises, and yet the level holds. That behavior suggests someone is absorbing the flow. It doesn't prove an iceberg, and it doesn't say how long the absorption will last.

Plenty of people claim to see icebergs on their forex DOM. Most of those cases are better explained by quote refreshing and aggregation effects.

Has anyone actually confirmed an iceberg by comparing the retail view with a futures book?

[Amanhasnoname]

I tried this once with a friend who trades the euro futures. For a couple of weeks we compared his order book with what my retail platform showed on EURUSD during the London morning. There were a few occasions where he could see a level on the futures soaking up selling for several minutes, with the displayed size refilling each time, and on my side price simply refused to drop below a certain point despite repeated tests.

So on those few days the effect showed up on both screens, which convinced me that something real was behind it. What it didn't do was tell me anything useful in advance. Several times the level held for ten minutes and then gave way all at once, and we only knew afterwards which way it would go.

My own platform's depth view I stopped trusting altogether. The sizes there jumped around constantly in a way that had more to do with the broker refreshing quotes than with anyone's actual orders.