price discrepancies

[Perrington]

I think the main point about the datafeed, FXCM and all... is more a case of false entry signals as opposed to exit signals, although exits are just as important... How do you know when to trust an exit, if the data you made your entry signal on in the first place is unreliable ? False signals like hammers at the bottom of a trend, may infact not exist ! so you may take an entry based on a hammer candle from a datafeed that is innacurate..... The most likely people to have these innacuracies with their inhouse datafeed, are those you are trading with ! although, not all of them are sharks.. its always interesting and highly important if u intend to be successful, to buy a datafeed from a supplier who makes their money from selling datafeeds as opposed to acting as a broker, this is what they specialise in, this is what makes their business model sink or swim.

 

[JTrader]

Are centralised datafeeds - creating transparency of pricing the way forward?

In my opinion, a good way forward for retail forex brokers - in order to build trust with their clients would be to use the EBS/Reuters datafeeds within their charting packages - rather than their own datafeeds - EBS/Reuters are the most "official like" pricing sources within the interbank market - upon which, retail brokers predominantly seems to base their prices upon anyway - or retail brokers may alternatively base their prices upon the prices of individual banks that trade upon these platforms.

While subsribing to these datafeeds may be quite expensive (but surely not all that much) for the retail brokers - clients would then have a "central" price to work with - so that they can see exactly what is going on in the interbank market.

The retail brokers would then base their prices around the EBS/Reuters prices - and the amount that the brokers quotes deviates from EBS/Reuters would then give a good sense of how good a broker you are trading with, and how level a playing field they operate on.

This would have the effect of increasing transparency amd traders confidence and trust in their broker. It would then be in the brokers best interests to closely replicate the EBS/Reuters prices within their quotes - because if they didn't - they would lose customers.

But then again, is it in the brokers best interests to offer a fully tranparent service?
Yes is my immediate answer. But if collectively, it is not the standard practise of brokers to be fully transparent in how they reach their prices - and they can get away with not being transparent - they are likely to. What it needs is for one or two brokers to lead the way in the ways that I have suggested, and the rest will have to raise their game and follow......................

But perhaps all the retail brokers hold meetings and agree NOT TO MAKE certain improvements - as if one broker did make certain improvements - they would become the most popular broker - then the others would have to follow suit in order to keep customers - and if all retail brokers then offered the same transparent service/pricing - it would be in none of the retail brokers best interests anyway - because their ability to profit through market manipulation would be reduced :?: :?:

For me, the next best setup would be to trade from the datafeed of the retail broker that you trade with - as at least then these two variables match one another.

Cheers

jtrader.

 

[c6ackp]

As you pointed out jtrader it's not in the broker's interest to do this, as most new traders wouldn't even realise what's going on.

I was just watching a good example of this as your post appeared. The traders @ FXCM were skewing the EUR/JPY price 3/4/5 pips off market (for whatever reason). This means their 4 pip spread becomes 7/8/9 pip spread!! Easy money

If you want to avoid the skew in forex the way to go is Globex futures.

Steve

 

[JTrader]

C6 -
The trader's @ FXCM were skewing the EUR/JPY price 3/4/5 pips off market (for whatever reason). This means their 4 pip spread becomes 7/8/9 pip spread!! Easy money

Hi C6

were they skewing this price 3//4/5 pips from the Reuters or EBS prices? if so, how do you have access to Reuters or EBS prices?

Cheers

jtrader.

 

[c6ackp]

Hi jtrader

I'm using XTick prices @ the moment as I like the software a lot. I don't have access to Reuters/EBS, but I can tell when the skewing occurs because normally IG/FXCM/XTick are identical (within 1/2 pips, say).

However, something changes at the trading "hotspots", i.e. as soon as the trader's @ FXCM figure they know something about the likelyhood of the next move/reversal they start to make the game harder.

This is what I think is happening. The price deviation may be occurring due to limiting exposure, or some other reason though.

But if you owned a retail forex firm, it would be mighty tempting to do this, wouldn't it!?

All part of the fun

Steve

 

[JTrader]

Thanks Steve - the very idea of a trader sat at the brokers desk skewing the brokers prices - still sucks though!

Still - IF all the retail brokers prices remain within 1-3 or perhaps 4 pips of each other for the vast majority of the time - as i have been told is the case by a few retail forex brokers - things cannot be too bad!

jtrader.

 

[JTrader]

Hi c6

Do you know what forex datafeed XTICK uses?

Cheers

jtrader.

 

[c6ackp]

jtrader

I tried to find out from the XTick support guy (who is (usually!) very helpful) and all I could get was:

"mixed data from some banks"

It's a good feed though - much less choppy than, say, GTIS - so easier to read for intraday.

Steve

 

[c6ackp]

Hi GJ

I don't think there's any mention of stop-hunting on this thread, just about data feeds which can be more/less noisy depending on the source.

I don't know if the price skewing is a function of running a book or if it really is intentional. From other posts I've seen there *seems* to be a general acceptance that it's intentional. It appears to be quite blatant on the dow where the actual price is known to everyone, so it's probably reasonable to assume that this can happen in fx also.

Steve