BUY SELL orders/deals explanation - page 3
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In my opinion, you're trying too hard to paint the sleazy-broker picture. So it comes as no surprise to me that the poster starts asking you questions about brokers. Brokers do-not operate a risk-free-business. Whats the difference between charging a spread vs a commission form the trader's point of view.... mathematically nothing... it still starts me off with a negative sum game.
Whoever said that slippage had to be negative to the mass Forex traders surely pull the wool over allot of people eyes. This idea must have come from the bucket shops who always pocketed the positive slippage back in the past :)
Ok, I would like to continue this very interesting discussion, as for me, not everything is clear, far away.
In fact I am not sure that things are working so differently between Forex and stock exchange, doesn't it depends more on how you are trading, I mean by which intermediary ? Of course one thing is fundamentally different, as stated by Malacarne, stock exchange are traded on a centralized market, while there is no central market for forex.
The OP was talking about MqlTick and the last price. On Forex, and MT5, the last price is only available (and enabled) for some broker which are using Exchange execution, as far as I have observed it. This kind of broker is ECN broker (in opposition of Market Maker), right ?
So, as we have last price on forex with Exchange execution type, which is the same type use for Stock Exchange, why can we observe that, with Forex last price is always the bid, and with Stock Exchange last price can be bid, ask or even other price ? In the beginning I thought it was clear but even with answer from Malacarne or Ubzen, I am now in the mist !
IMO, last price just make sense in the stock market, and is the market price of an asset or the price of the most recent transaction. Last price can move to Bid or Ask price, it depends of the last transaction.
Do we have last price in MT4? No, because MT4 don't exchange stocks, just currency.
For instance, most homebroker just show last price in graphs, don't show Bid and Ask, just in the moment you ask for a trade.
Also, at this moment, as market is centralized, as stated by Malacarne, homebroker can show Bid/Ask different as MT5 show when you Sell or Buy stocks.
IMO, last price just make sense in the stock market, and is the market price of an asset or the price of the most recent transaction. Last price can move to Bid or Ask price, it depends of the last transaction.
angevoyageur:
Maybe you are right, but we are here to understand, so the question is why ? I don't see at first a valid reason, there is also a last transaction in Forex, of course for your broker as there no centralized market.
figurelli:
Why? Simple, as Malacarne stated, the stock market is centralized, i.e., someone (like BM&FBovespa in Brazil) that will check all trades in the market. If you know all trades you know the last price, simple as that! But in the Forex, trades are done direct, without a centralized control, so if Figurelli buy from Alain using Broker XYZ, who cares? Just the Broker XYZ and their regulators, if they really have this unified control, but if you have a different broker probably each one will show one last price. So, in my opinion, this last price, not centralized, don't make sense to the market.
Do we have last price in MT4? No, because MT4 don't exchange stocks, just currency.
angevoyageur:
figurelli:We have last price with some broker on MT5 (Forex), so it would be great to understand what it means and if it's usable for trading with Forex.
I totally agree about that, since as I stated before they have their last price. Anyway, be aware about this last price, since it's not Forex symbol last price, as far as I know this is an utopy.
For instance, most homebroker just show last price in graphs, don't show Bid and Ask, just in the moment you ask for a trade.
What is a "homebroker" ?
figurelli:
Sorry about that, we use this acronym in Brazil and some other Latin America countries. It's any final consumer trading platform, like MetaTrader.
figurelli:
Also, at this moment, as market is centralized, as stated by Malacarne, homebroker can show Bid/Ask different as MT5 show when you Sell or Buy stocks.
angevoyageur:
Sorry, but here too I don't understand, can you explain please ?
figurelli:
For sure, I refer "New Order Window", some homebrokers show the Last Price instead of Bid/Ask as MT5 (as the graph problem). Looks irrelevant, but even advisors here have doubts if the spread is high.
As MT5 don't show last price on graphs (it's allways Bid, as stated) trader of stocks used with homebrokers can't identify easily the market price of the asset, what is a big cultural problem, mainly if you have a big spread.
It certainly would be an interesting feature to have the possibility to draw the chart from Bid/Ask/Last.
figurelli:
I see this as imperative for a multi-market platform, like MT5, mainly when you have low liquidity assets.
angevoyageur:
Maybe you are right, but we are here to understand, so the question is why ? I don't see at first a valid reason, there is also a last transaction in Forex, of course for your broker as there no centralized market.
figurelli:
...Why? Simple, as Malacarne stated, the stock market is centralized, i.e., someone (like BM&FBovespa in Brazil) that will check all trades in the market. If you know all trades you know the last price, simple as that! But in the Forex, trades are done direct, without a centralized control, so if Figurelli buy from Alain using Broker XYZ, who cares? Just the Broker XYZ and their regulators, if they really have this unified control, but if you have a different broker probably each one will show one last price. So, in my opinion, this last price, not centralized, don't make sense to the market.
Ok, let take one point at a time.
Again, we are talking about MT5, where some brokers provides Depth of Market and last price. Of course this last price can't be the last of all the Forex, it can only be the last price for this broker. In the same way, DOM provided for forex instrument can only be for the broker who provided it. It is understood.
But if some brokers provide this last price (and DOM) for Forex, I can only suppose this can be useful and accurate data (again, with the restriction stated above). Otherwise we have to conclude that DOM and last price for Forex are useless. Is it your opinion ?
If not, the question remains, why the last price provided in these conditions is always the bid ? The broker knows the price of each trade, why can't he provide the last price as bid or ask ? Sorry to insist but I still do not understand.
Why is this sooo important to you? It might be helpful to explain this more so that we could understand your question better. I mean they're good question ... when someone thinks about it enough :) ... but why important to You?
I understand your question that the brokers last.price cannot always be someone selling ... meaning that sometimes someone must have been buying. So where's the Ask for last.price when this happens? And I think your other question is why is Last.Price important? I'm not going to pretend to understand how everything works in the background with mt5, for that we could always try asking metaQuotes and their answer is probably going to be none-of-your-business. I'm just going to give my opinions as I've come to understand them through my reading from online sources for the past 3+ years.
Both MM and ECN have advantages and dis-advantages. As far as the Last.Price, I cannot foresee it being very helpful. Therefore, I'll have to say that my Opinion is that its Useless for Forex.
Ok, let take one point at a time.
Again, we are talking about MT5, where some brokers provides Depth of Market and last price. Of course this last price can't be the last of all the Forex, it can only be the last price for this broker. In the same way, DOM provided for forex instrument can only be for the broker who provided it. It is understood.
But if some brokers provide this last price (and DOM) for Forex, I can only suppose this can be useful and accurate data (again, with the restriction stated above). Otherwise we have to conclude that DOM and last price for Forex are useless. Is it your opinion ?
If not, the question remains, why the last price provided in these conditions is always the bid ? The broker knows the price of each trade, why can't he provide the last price as bid or ask ? Sorry to insist but I still do not understand.
Thanks for taking one point at a time ;-)
Regarding your main question "why the last price provided in these conditions is always the bid? ", in my opinion this is a decision of MQ, because there is no rule about that.
And this is the big point for me, in stocks this price is well know by all actors of the market, it would be no sense don't publish the right price.
But in Forex, the platform providers, as MQ, can decide what last price use, since there is no centralized price. And looks like MQ decide buy Bid.
However, if we have DOM as you stated, and some brokers delivery the right last price (I'm not sure about that, regarding Forex), in my opinion this 'allways Bid' simplification may change (even if each broker has their different last price).
Anyway, if you ask me "Why they don't change?", I think we must ask them about that, because maybe our vision is myope about that, or maybe they didn't realize about this possibility, or, yet, maybe they plan do this in future.
Why is this sooo important to you? It might be helpful to explain this more so that we could understand your question better.
Both MM and ECN have advantages and dis-advantages. As far as the Last.Price, I cannot foresee it being very helpful. Therefore, I'll have to say that my Opinion is that its Useless for Forex.
"Last Price is useless for Forex". I'm astonished with this sentence...
I really don't know how experienced you guys are with trading, however the last price is absolutely important in all aspects of trading, especially for those who develop expert advisors.
Let me put a very simple example of how the last price can have serious implications for trading systems:
■ Imagine an expert advisor that works with STOP LIMIT ORDERS
■ Stop limit orders work with 2 different prices, the first one is usually called the TRIGGER price and the second one is called the EXECUTION price.
■ The functioning system of stop limit orders is very symple: if the TRIGGER price is reached, a limit order is immediately sent to the broker to be executed at the EXECUTION price.
Now please tell me: when will a stop limit order be activated? The answer is: when the LAST price is equal (or higher) to the TRIGGER price !!!
With this in mind, consider now the design pattern of MT5: the last price is always the bid price. Please consider the first situation below:
Now consider the second situation:
This is exactly what is occuring at this time with MT5 when trading Forex... What conclusions can be drawn from this situation?
1) SELL STOP and SELL STOP LIMIT orders are being executed always at the "right price", i.e., we actually see the chart reaching the trigger price for these types of orders...
2) BUY STOP and BUY STOP LIMIT orders are being WRONGLY executed, beacuse they are executed, by design, when the ASK price crosses the TRIGGER price, however we don't actually see the chart reaching that price level.
Now imagine expert advisors that work with scalping strategies, day trading, etc, where even a small price change could be the difference between profit and loss?
This is a very interesting discussion, as stated by Alain, and in my opinion it's worth knowing exactly how the software is designed, otherwise any EA development attempt could fail due to this "useless" detail...
"Last Price is useless for Forex". I'm astonished with this sentence...
I really don't know how experienced you guys are with trading, however the last price is absolutely important in all aspects of trading, especially for those who develop expert advisors.
Let me put a very simple example of how the last price can have serious implications for trading systems:
■ Imagine an expert advisor that works with STOP LIMIT ORDERS
■ Stop limit orders work with 2 different prices, the first one is usually called the TRIGGER price and the second one is called the EXECUTION price.
■ The functioning system of stop limit orders is very symple: if the TRIGGER price is reached, a limit order is immediately sent to the broker to be executed at the EXECUTION price.
Now please tell me: when will a stop limit order be activated? The answer is: when the LAST price is equal (or higher) to the TRIGGER price !!!
With this in mind, consider now the design pattern of MT5: the last price is always the bid price. Please consider the first situation below:
Now consider the second situation:
This is exactly what is occuring at this time with MT5 when trading Forex... What conclusions can be drawn from this situation?
1) SELL STOP and SELL STOP LIMIT orders are being executed always at the "right price", i.e., we actually see the chart reaching the trigger price for these types of orders...
2) BUY STOP and BUY STOP LIMIT orders are being WRONGLY executed, beacuse they are executed, by design, when the ASK price crosses the TRIGGER price, however we don't actually see the chart reaching that price level.
Now imagine expert advisors that work with scalping strategies, day trading, etc, where even a small price change could be the difference between profit and loss?
This is a very interesting discussion, as stated by Alain, and in my opinion it's worth knowing exactly how the software is designed, otherwise any EA development attempt could fail due to this "useless" detail...
There's no need talking down to the rest of us. We just have different opinions about whats a developer should know vs what they assume (ass_u_me). Every decent developer on mt4 || mt5 should know that Buy@Ask and Sell@Bid. If this developer doesn't know how to turn-on the Ask_Line then who's fault is it MetaQuotes? This same developer may not know that his indicator is re-painting because he cannot see it ... whose fault is it metaQuotes? This same developer may not know that a computer cannot represent doubles_exactly and if( price != price ) is bad programming ... whose fault is it metaQuotes?
You left some very important information out of your examples. Here a link which give a better example http://www.investopedia.com/terms/s/stop-limitorder.asp.
You'll need to tell us what the Ask_Price is doing in-order to provide a more complete example. Otherwise, you're just giving excuses to bad_programming. As in, if you cannot see it that means it doesn't exist.