Why my broker is quoting different prices and charts to other platforms

[WallStreetHero]

So i have been using GFT and was comparing the charts to other platforms when i noticed the prices were very different and using GFTs sister company forex.com i compared the S&P500 from there Dealbook 360 to forex.com's MT4 and here is what happened on the charts.

These are daily charts for S&P500

On 15th September - GFTs Dealbook shows s&p500 to have had a low of 1970.4 while Forex.coms MT4 has a low of 1976.88,

SUCH A DIFFERENCE ON PRICES, i used live chat on GFT to speak to some women and she was clueless especially considering both GFT and Froex.com are owned by the same company and her only answer was that they have different market feeds.

 

[WallStreetHero]

I first noticed this when i stumbled on some online analysis and the chart pattern shown here wasn't on my chat.

This could be terrible as i could miss pin bars and trade pin bars which arnt actually pin bars, i take it most of the SB and CFD brokers are the same.

 

[IzaIza]

yes, all many brokers have different sources/banks to getting their prices. also their time-frame for hours are different. i used many different brokers before, but eventually found one that works the best with my trading strategy. be careful with your trading platform and broker. 2 brokers with mt4 will have different results.

 

[IzaIza]

even if they have the same source, they may be recording the movements at different times.

 

[Sigma-D]

I noticed this with OANDA and Alpari the other day on an NZD cross. The Alapri spread was higher and disjoint the OANDA one - I could have bought OANDA's and sold Alpari and theoretically have locked in an immediate arb profit, but then it occurred to me, whoever I sell/buy from I've got to close the position with them regardless of how skewed they are with respect to other brokers.

How would a professional have arbed that situation - or would they be similarly constrained?

 

[Sigma-D]

Mostly done via HFT these days (latency arb algos etc).

Yeah, but on forex they still got to sell back to who they bought it from or they're not flat - they'd have two open positions.

 

[taozemin]

Theats by copy trading:

Hey, friends here. Do you think copy trading will eliminate the necessity of studying the technical analysis? Because with copy trading, a friend with no knowledge about technical analysis is probable to make much more money than you do. On the contrary, you are studying the markets all day with the incomplete technical anlaysis knowldge! what a pity.

 

[gerryg]

There is no common price on the market, price quotes your broker provides is formed from aggregate of prices from LP and picking best price available and sending it to you. That's why different brokers even broker with different platforms can supply different price, though with insignificiant differences (within 1-5 pips). Some cute guys can even exploit these price inefficiencies to get profit (which is considered as non-trading practices) and get a ban soon for " arbitrage" so be careful with that..

 

[Sigma-D]

For many retail participants, yes. If you're running HFT then you're almost certainly operating in a multi-LP, multi-price environment.

So if I understand your question correctly, it wouldn't be easy to run an arb strategy on most retail platforms. Firstly there would be few (if any) opportunities after costs, and secondly the dealing desk will close you down once they catch on. If you're in the institutional space then, as previously mentioned, price/latency, triangulation, stat arb etc are all used in HFT FX. Hope that helps.

Thanks for the response. If it's OK to continue asking stupid questions, even if you are an institutional grade trading outfit with multiple liquidity providers, you still have an account with each that will have you bot/sld. If you buy from one and sell to another, you have two open positions, surely?

I'm trying to get my head round why it would be any different - at that basic level - for an institutional grade player or a retail punter. While on aggregate you would have locked in a profit, until you square those positions away, it's an unrealised profit.

I'm also struggling why it's so different from real life. If you buy/sell a bag of oranges you can do it from and to anyone you like and you're flat. It's not like you have to pay back the person you bought them from with another bag or be compelled to buy a bag back from the person you sold it too.

I don't think I'm built for this game somehow.

 

[sk1105]

Someone is free to correct me if I'm wrong, but these online broker platforms are not obliged to follow the exchange prices to a tick. These platforms are representative of the markets their traders are choosing to make, obviously with the intention to keep it as in line with the actual market as possible.

Do you think you're trading the S&P500 while the US exchange is closed? You're trading a market they are making, and this is often why you get a lot of people complaining about 'stop hunting' or 'fishing out orders', i.e. where the market maker behind the platform is keeping the bids/offers in line with actual market but then notices a few orders just above or below that he'd like to clean off his books. These little spikes might be why you saw different lows on different platforms, for example.

You can ask them to prove why they made the markets they did if you're trading decent size (ie they'll look up tick data on a real platform like BBG, etc) but typically if you're punting small chips they'll fob you off with some other reason.

This is generally why I personally don't see much use in scalping with spreadbetting platforms. The intraday ticks are generally just the market maker keeping punters interested with nice flashing screens. Trade on larger timeframes and you'll be in line with the actual market.