EUR/USD with IB TWS

[heidel]

Hi

I am totally new to spot FX trading and I have questions and I appreciate that someone can help me with some answers.

1. I am using IB TWS platform setup with Ideal Pro for EUR/USD. Why or what is the reason for spot fx not showing the last price on my IB TWS execution platform? Is this the standard for trading spot FX without the last price shown?

2. I also noticed the Ask price and Bid price on the top right cornor with a small live updating figure on my TWS platform. Why is it there and what is it use for?

3. I think I came across an article that says when trading spot FX, we can't buy at bid and we can't sell at ask. Is this correct? If so, what is the reason? I know I trade ES futures, I can buy at bid and sell at ask price.

Thank you.

 

[a_gnome]

Hi

I am totally new to spot FX trading and I have questions and I appreciate that someone can help me with some answers.

1. I am using IB TWS platform setup with Ideal Pro for EUR/USD. Why or what is the reason for spot fx not showing the last price on my IB TWS execution platform? Is this the standard for trading spot FX without the last price shown?

2. I also noticed the Ask price and Bid price on the top right cornor with a small live updating figure on my TWS platform. Why is it there and what is it use for?

3. I think I came across an article that says when trading spot FX, we can't buy at bid and we can't sell at ask. Is this correct? If so, what is the reason? I know I trade ES futures, I can buy at bid and sell at ask price.

Thank you.

Hi Heidel,

Since no one else has answered you I thought that I would have a go:

I don't have TWS in front of me as I write this but the key different between something like ES and spot forex is that the former is an exchange traded instrument so there is a single point at which all the trading occurs. Spot forex on the other hand has no single market place: instead you trade with a counter-party who will quote you a two way price.

In answer to your specific questions:
1. The best indication of where the market is for spot forex is the current bid-ask quote. Typically the people who offer quotes don't want to reveal where they have traded as this would give away their position so they don't report the last trade.

2. It is the bid and ask which are the live prices in this case rather than the last traded price.

3. Usually it is correct that you can't buy the bid or sell the ask because of the fact that you are trading with a counter-part rather than on an exchange. However IB and TWS do offer an improvement over this situation: IB operates a sort of ECN (mini exchange) for forex so that as well as a few liquidity providers offering quotes on it you can also trade directly with other IB users. You can in fact post orders to buy at the bid or sell the ask and if someone else on IB trades with you then you will be filled. IB act as a trade facilitator rather than the usual counter-party which is why they charge a commission (usually the counter-part is compensated by way of you having to take the wrong side of the spread).

Hope this helps

 

[heidel]

Hi a_gnome

Thank you for taking the trouble to post this.
Now I am much clearer from your contribution.