Price Differences between brokers.

[trendie]

I know brokers make their own markets, and prices are "indicative", but if its a "no-dealing-desk" set-up, shouldn't prices reflect the underlying?
(I have been having problems with FXCM and their glitchy MT4 platform. It's been suggested its entirely my problem, from age of laptop (12months) to wi-fi, to broadband speed (15Mbps). However, InterTrader, who I use as a side-by-side test, functions faster, and is less glitchy).

Anyway, noticed the disparities between prices on the demos.
Should the prices differ this much?

 

[hatemypips]

I know brokers make their own markets, and prices are "indicative", but if its a "no-dealing-desk" set-up, shouldn't prices reflect the underlying?
(I have been having problems with FXCM and their glitchy MT4 platform. It's been suggested its entirely my problem, from age of laptop (12months) to wi-fi, to broadband speed (15Mbps). However, InterTrader, who I use as a side-by-side test, functions faster, and is less glitchy).

Anyway, noticed the disparities between prices on the demos.
Should the prices differ this much?

Hmmm, its really weird, what I heard from brokers that differences may occur between displayed and execution price, but not between displayed price of demo and real account. Does it somehow have negative impact on your trading performance?

 

[trendie]

Hmmm, its really weird, what I heard from brokers that differences may occur between displayed and execution price, but not between displayed price of demo and real account. Does it somehow have negative impact on your trading performance?

No impact. I don't scalp, so not entirely bothered, and I also trade across more than 1 account.
But just curious, as I don't think I have noticed this before!

 

[Ovitany]

Brokers use spreads which might impact difference from current market price.Some use fixed, some floating spreads. It should be clearly discussed with broker as they should have clear terms and conditions.Also, having difference between prices on demo account is something that is not at all common.

 

[J_C_Anderson]

It is quite common situation. There is no centralized market in Forex, so each broker creates its own marketplace. In fact, broker acts both as an intermediate and counterpart in each trade.

The main disadvantage of such specific situation is that you could not use various platforms provided by different brokers simultaneously. Stock traders quite often use one platform for charting and another one for placing trades because all stock exchanges are centralized, so the prices in all platforms are the same. At the same time, Forex traders should use exclusively the platforms provided by the broker they are working with to exclude mistakes.

There is no way to deal with this issue, but it is possible to reduce the impact of the price difference on your trading process and its results just by switching to swing/mid-term trading. In such case, the short term price fluctuations would not be so important. For sure, it would be a bit more difficult since fundamental analysis of currencies is quite complicated (at least more complicated than in case of equitites or commodities), but this approach offers numerous advantages.

 

[hatemypips]

I know brokers make their own markets, and prices are "indicative", but if its a "no-dealing-desk" set-up, shouldn't prices reflect the underlying?
(I have been having problems with FXCM and their glitchy MT4 platform. It's been suggested its entirely my problem, from age of laptop (12months) to wi-fi, to broadband speed (15Mbps). However, InterTrader, who I use as a side-by-side test, functions faster, and is less glitchy).

Anyway, noticed the disparities between prices on the demos.
Should the prices differ this much?

I guess it depends on liquidity providers. I trade with Tickmill and Hotforex and sometimes their prices and spreads are different but they say it depends on liquidity providers' "best available price". They are simply brokers after all.

 

[Daniel Jones]

For sure, it would be a bit more difficult since fundamental analysis of currencies is quite complicated (at least more complicated than in case of equitites or commodities), but this approach offers numerous advantages.

That strategy...can you elaborate on the advantages please?

 

[J_C_Anderson]

That strategy...can you elaborate on the advantages please?

Yes, sure.
Each time making trading decision you should find a balance between using fundamental and technical analysis. At the same time, importance of each approach differs depending on particular trading style. That is why in case of swing/mid-term trading you can pay less attention to technical analysis and searching for entry point while fundamental analysis becomes more important. In other words, in case if you can make reasonable assumptions on the price movementsin the next few days, price changes during one particular day means nothing for you.
Another important issue is psychology - in case of mid-term trading, you should not watch the charts all the time, so it would be easier to trade in accordance with th rules set forth by the system and hold the position long enough toget substantial profit.

 

[bunti_k23]

Yes, sure.
Each time making trading decision you should find a balance between using fundamental and technical analysis. At the same time, importance of each approach differs depending on particular trading style. That is why in case of swing/mid-term trading you can pay less attention to technical analysis and searching for entry point while fundamental analysis becomes more important. In other words, in case if you can make reasonable assumptions on the price movementsin the next few days, price changes during one particular day means nothing for you.
Another important issue is psychology - in case of mid-term trading, you should not watch the charts all the time, so it would be easier to trade in accordance with th rules set forth by the system and hold the position long enough toget substantial profit.

charts + psychology overule everything.....................

 

[hatemypips]

charts + psychology overule everything.....................

How you could justify statistical significance of any technical pattern? If you don't rely on statistics then you trade based on your impressions&imagination what can't be profitable.

 

[bunti_k23]

How you could justify statistical significance of any technical pattern? If you don't rely on statistics then you trade based on your impressions&imagination what can't be profitable.

hm agree with you, you need to follow a set of rules with money management designed to suit your system.

 

[bhagesh.nair]

I know brokers make their own markets, and prices are "indicative", but if its a "no-dealing-desk" set-up, shouldn't prices reflect the underlying?
(I have been having problems with FXCM and their glitchy MT4 platform. It's been suggested its entirely my problem, from age of laptop (12months) to wi-fi, to broadband speed (15Mbps). However, InterTrader, who I use as a side-by-side test, functions faster, and is less glitchy).

Anyway, noticed the disparities between prices on the demos.
Should the prices differ this much?

When you are a basic retail trader, with an account fund of Sub $5000, brokers tend to put you on variable spreads.
The rates can highly differ from broker to broker, depending on the depth of their liquidity.
However, you can always negotiate the terms and spreads with the broker before opening an account with them.
there are like a million options out there, If you have to put your hard earned money into a trading account, do enough research.

 

[Lopata]

Such a big difference isn't something usual actually. At least I've never faced such. But thanks for your replays and explanations. Frankly speaking, lately, I deal only with dekocorp because of no commission deposits and I don't know enough about other services.