brokers using manipulated price feed for MT4

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Old Mar 16, 2012, 10:07am   #1
Joined Mar 2011
brokers using manipulated price feed for MT4

Hello !

My problem is with brokers using the manipulated price feed for the strategy tester/back tester, what are peoples thoughts on what should be an illegal practice ? As most brokers use the price feed from a main provider (better not mention name) and the results when trying to optimze an EA vs more accurate data imported from a reliable source like dukascopy are 10-1, so for the unsuspecting newbie, who thinks he has found the holy grail in back testing , then loses everything with same broker on live system, is this not a form of fraud ?

As it seems the price feed uses a smoothed price, like an average for the period, so for an H1 period it would take the average price, not the actual price on the 60th minute, which is a huge difference. I also noticed they just simply remove times with bad/volatile prices altogether, one time I analysed the prices of a symbol and found that the ENTIRE month of June was missig for 2010!!

Are there any legal cases against the brokers on this disgusting practice yet ?

Also, anyone know any brokers that have honest data in there back tester, for example that DO NOT use the main provider ?

As it is a pain in the ass uploading bloomberg data or sometimes I use dukascopy jforex data also, which i am led to believe is the best ?
thanks

Last edited by saj1011; Mar 16, 2012 at 10:21am.
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Old Mar 16, 2012, 12:28pm   #2
Joined Apr 2006
Re: brokers using manipulated price feed for MT4

In my experience, pratically every retail forex broker manipulates their data feeds. I dont really understand exactly why this is done, the differences are generally way too subtle to pick up on, but it does have a very significant effect on TA based mechanical systems.

I suspect if you looked into this in detail, there's probably an edge that could be exploited.

Most systems that backtet well, will tend to fail when going forward, so I dont there's any kind of conspiracy theory there, nor does there need to be, although I might be wrong. The effects of data feeds is an area that I've only just stared looking at, but you are right, there are definately games being played.
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Old Mar 16, 2012, 12:40pm   #3
Joined Oct 2006
Re: brokers using manipulated price feed for MT4

Quote:
Originally Posted by saj1011 View Post
Hello !

My problem is with brokers using the manipulated price feed for the strategy tester/back tester, what are peoples thoughts on what should be an illegal practice ? As most brokers use the price feed from a main provider (better not mention name) and the results when trying to optimze an EA vs more accurate data imported from a reliable source like dukascopy are 10-1, so for the unsuspecting newbie, who thinks he has found the holy grail in back testing , then loses everything with same broker on live system, is this not a form of fraud ?

As it seems the price feed uses a smoothed price, like an average for the period, so for an H1 period it would take the average price, not the actual price on the 60th minute, which is a huge difference. I also noticed they just simply remove times with bad/volatile prices altogether, one time I analysed the prices of a symbol and found that the ENTIRE month of June was missig for 2010!!

Are there any legal cases against the brokers on this disgusting practice yet ?

Also, anyone know any brokers that have honest data in there back tester, for example that DO NOT use the main provider ?

As it is a pain in the ass uploading bloomberg data or sometimes I use dukascopy jforex data also, which i am led to believe is the best ?
thanks
Yes there have been some cases that resulted in very heavy fines though not for the specific issue you mention, google FXCM fine, Gain Capital fine, IKON fine to start with. Also see the following thread, though the videos may have been deleted by now due to legal threats.

http://www.trade2win.com/boards/fore...s-setting.html
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Old Mar 19, 2012, 5:38pm   #4
Joined Sep 2006
Re: brokers using manipulated price feed for MT4

Saj1011

1. the market is OTC....not an exchange....so prices will be different from different brokers. It depends where they get their prices from. That is fundamental and what you have to live with.
2. Demo versions and Live versions may be different (ie price feed may be different, usually done bcause of cost, nothing more).
3. If you are using Metatrader or Act Forex broker you can collect data via DDE Server. This should be used for backtesting.
4. You should then forward test
5. Be careful when trying to optimise, it can end in tears
6. You cant rely on anyones data until you have cleaned it and verified it.
7. No one is conspiring against you.
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Thanks! The following members like this post: Billy Gates
Old Mar 23, 2012, 6:47am   #5
Joined Dec 2011
Re: brokers using manipulated price feed for MT4

Quote:
Originally Posted by saj1011 View Post
Hello !

My problem is with brokers using the manipulated price feed for the strategy tester/back tester, what are peoples thoughts on what should be an illegal practice ? As most brokers use the price feed from a main provider (better not mention name) and the results when trying to optimze an EA vs more accurate data imported from a reliable source like dukascopy are 10-1, so for the unsuspecting newbie, who thinks he has found the holy grail in back testing , then loses everything with same broker on live system, is this not a form of fraud ?

As it seems the price feed uses a smoothed price, like an average for the period, so for an H1 period it would take the average price, not the actual price on the 60th minute, which is a huge difference. I also noticed they just simply remove times with bad/volatile prices altogether, one time I analysed the prices of a symbol and found that the ENTIRE month of June was missig for 2010!!

Are there any legal cases against the brokers on this disgusting practice yet ?

Also, anyone know any brokers that have honest data in there back tester, for example that DO NOT use the main provider ?

As it is a pain in the ass uploading bloomberg data or sometimes I use dukascopy jforex data also, which i am led to believe is the best ?
thanks
Pick a broker that you know always reflects your limit orders in the quote and you'll be fine. MB Trading or MB Trading UK, for example.
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Old Nov 15, 2012, 5:11pm   #6
pgf
Joined Nov 2012
Re: brokers using manipulated price feed for MT4

Quote:
Originally Posted by The Pear View Post
Saj1011

1. the market is OTC....not an exchange....so prices will be different from different brokers. It depends where they get their prices from. That is fundamental and what you have to live with.
2. Demo versions and Live versions may be different (ie price feed may be different, usually done bcause of cost, nothing more).
3. If you are using Metatrader or Act Forex broker you can collect data via DDE Server. This should be used for backtesting.
4. You should then forward test
5. Be careful when trying to optimise, it can end in tears
6. You cant rely on anyones data until you have cleaned it and verified it.
7. No one is conspiring against you.
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Old Nov 16, 2012, 7:45am   #7
 
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Joined Oct 2012
Re: brokers using manipulated price feed for MT4

Quote:
Originally Posted by The Pear View Post
Saj1011

6. You cant rely on anyones data until you have cleaned it and verified it.
Always worked with me) Actually I don't believe that my broker does these things about prices, because it's just hard to do) there are a lot of easier ways to blow up my deposit))
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Old Nov 16, 2012, 5:26pm   #8
Joined Sep 2006
Re: brokers using manipulated price feed for MT4

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Originally Posted by forever_young View Post
Always worked with me) Actually I don't believe that my broker does these things about prices, because it's just hard to do) there are a lot of easier ways to blow up my deposit))
Sadly its very easy to do, but if you are trading with a dealer...IG, LCG, ETX etc etc you should realise they can move the price.....it may be for legit reasons or otherwise. In any event we should be greatful for having the choice of so many providers. Its a great leveler.
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Old Nov 20, 2012, 3:44pm   #9
 
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Joined Jan 2012
Re: brokers using manipulated price feed for MT4

I found this correspondence on the other forum. It's very interesting. But can we believe it. Is it really so that all brokers who offer mt4 are market makers? what do you think?

Forums - IRONY: Metatrader4 forgot to shred this document..evidence of scam
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