BUY SELL orders/deals explanation - page 2

[Alain Verleyen]

Malacarne:

The spread is valid only for the customer, but not for the broker himself! Remember that the broker can always buy/sell at bid, so in the case you sell, the broker has two options: either sell the amount at the same price (bid price) in the market or sell this amount to another (internal) customer at the ask price, practicing the spread...

Put this in mind: the broker is like a bank, he never loses!

In my opinion, while interesting in his own, these considerations are off-topic. We are talking about MT5, bid/ask price and the value of MqlTick.last. How a broker work has nothing to do with this question from a retail trader point of view.

[LAS TEN]

Malacarne:

There is a discussion about the types of brokers here. You could first take a look there.

Maybe you'll find something interesting. If not, please ask again in the forum. Anyway, I hope this might be useful.

Thank  you again for your explanations ! 

Maybe I am a little bit mule/rude but what I read in the "here" link above give me the old opinion that I had: I think the terms are confused, intentionally mixed by the "makers" (brokers) and "distributors" (forum leaders).

So to be more clear:

On a hand you said "Discussions about brokers are forbidden in the community. Sorry".....

But on the other hand you send me to a link that speaks about these (forbidden) things..... and do not clarify the problem !

Please correct me if I am wrong !

[Rodrigo Malacarne]

angevoyageur:
A buy limit order isn't a deal, it's a pending order with no actual transaction. The buy will only occur (pending order triggered) when the ask price of this symbol will reach the buy limit order price. The deal is at ask price for the buyer. The trade will only occur at this price (buy limit order price) if a trader will sell at this price, if there is no seller at this price the price can go up and you will get slippage.

Can you quote what you think is actually 100% correct in the OP ? As I am not sure of what you mean.

Is it true in all case ? Can you explain why there is a Bid AND an Ask price for PETR4 for example, which is well a stock ?

It depends of the broker type. An ECN+STP broker is supposed to only work as an intermediary and doesn't take part to the transaction.

We are talking about retail traders using MT5 and a broker to trade. All trades in Forex Market occurs at bid for the seller, at ask for the buyer. Metaquotes choose to put the bid in MqlTick.last the same way they choose to draw charts with bid price. This is how I understand the issue, maybe I am wrong.

■ Alain, when a buy limit order is placed and someone sells at this price, we usually say that the trade is ocurring at bid price, and not at ask !!! So your sentence "The deal is at ask price for the buyer" is not correct...

■ When you say "if there is no seller at this price the price can go up and you will get slippage", this is also incorrect, once slippage does not affect limit orders (it doesn't matter if it's a buy limit or sell limit order)... See, for instance, this definition link and please pay attention to the sentence "The only way to avoid slippage is through the use of limit orders"...

■ What is 100% correct and was written by the OP is this sentence: "a SELL deal is done from BID price and a BUY deal from ASK price".

■ Is it true in all case? The answer is: not always... one exception to the "direct transaction mode" that takes place in stock exchanges would be, for instance, the case where the security has a market maker. But a market maker is, at the end, an institution itself... so, it's another definition question IMHO...

■ That's true... my intention was primarily to clarify how Forex markets differ from stock and futures markets... I didn't want to explain in details all types of Forex brokers...

■ Rearding the MetaQuotes option for putting the bid as MqlTick.last, this might be true for Forex markets... However, I can assure that MqlTick.last occurs both at bid and at ask for stocks and futures markets... 

[Rodrigo Malacarne]

tenlau:

Thank  you again for your explanations ! 

Maybe I am a little bit mule/rude but what I read in the "here" link above give me the old opinion that I had: I think the terms are confused, intentionally mixed by the "makers" (brokers) and "distributors" (forum leaders).

So to be more clear:

On a hand you said "Discussions about brokers are forbidden in the community. Sorry".....

But on the other hand you send me to a link that speaks about these (forbidden) things..... and do not clarify the problem !

Please correct me if I am wrong !

A discussion about a specific broker is completely different from a discussion about the existing types of brokers...

And if you take a look at the post, you'll actually see that there are some useful links (which you can click on it) that will help you to clarify your question...

[Alain Verleyen]

Malacarne:

■ Alain, when a buy limit order is placed and someone sells at this price, we usually say that the trade is ocurring at bid price, and not at ask !!! So your sentence "The deal is at ask price for the buyer" is not correct...

In Forex market, if you are placing a buy limit order it will be triggered at ask price, for you, the buyer. Check it on a chart. It's at bid price for the seller of course. I don't understand why your are arguing about that is you said exactly the same as me 2 sentence below : "What is 100% correct and was written by the OP is this sentence: "a SELL deal is done from BID price and a BUY deal from ASK price".

■ When you say "if there is no seller at this price the price can go up and you will get slippage", this is also incorrect, once slippage does not affect limit orders (it doesn't matter if it's a buy limit or sell limit order)... See, for instance, this definition link and please pay attention to the sentence "The only way to avoid slippage is through the use of limit orders"...

It's theoretically true, but what if the liquidity is low, if your buy limit (for example) don't have a seller at your price what happens in your view ?

■ What is 100% correct and was written by the OP is this sentence: "a SELL deal is done from BID price and a BUY deal from ASK price".

Ok.

■ Is it true in all case? The answer is: not always... one exception to the "direct transaction mode" that takes place in stock exchanges would be, for instance, the case where the security has a market maker. But a market maker is, at the end, an institution itself... so, it's another definition question IMHO...

So stock market can have spread (bid/ask) and fee (commission), not so different from Forex market finally.

[Alain Verleyen]

Malacarne:
...

■ Rearding the MetaQuotes option for putting the bid as MqlTick.last, this might be true for Forex markets... However, I can assure that MqlTick.last occurs both at bid and at ask for stocks and futures markets... 

You are right and I don't understand why. Seems like the last price can even be different from bid and from ask. I have to study a little.

[LAS TEN]

I have read both Malacarne and angevoyageur posts and I find them very interesting and full of information. You both rise very logically and pertinent observations. But unfortunately they are only theoretically. Where can I find the behavior of a certain broker? The simple answer is nowhere, as every brokers interpret the theoretic terms in their own way but do not have the courtesy to explain it in details to the customers !!!

So that is way I said above, in other words, that all the discussions are in vain !!!

In other words speaking : " We need the wheel, not designs and explanations about how to do it or how has to be done according to some others plans" 

[Alain Verleyen]

Comments that do not relate to this topic, have been moved to "Request not accepted by the server ?".

[Rogerio Figurelli]

angevoyageur:

Malacarne:

■ Alain, when a buy limit order is placed and someone sells at this price, we usually say that the trade is ocurring at bid price, and not at ask !!! So your sentence "The deal is at ask price for the buyer" is not correct...

In Forex market, if you are placing a buy limit order it will be triggered at ask price, for you, the buyer. Check it on a chart. It's at bid price for the seller of course. I don't understand why your are arguing about that is you said exactly the same as me 2 sentence below : "What is 100% correct and was written by the OP is this sentence: "a SELL deal is done from BID price and a BUY deal from ASK price".

Just talking about stock market orders/deals explanations, my main concern is that we don't have enough documentation and all explanations are too much empirical.

More than this, I may be wrong but the only MT5 server really enabled for stocks today is Brazilian Bovespa (if you guys know other please correct me and please give the address to I compare).

Anyway, in my opinion differences between BUY/SELL, orders/deals and BID/ASK prices regarding generic Forex/Stock markets are a great subject for a new topic.

So, my suggestion, since we just have empirical facts, would be focus and stress BUY/SELL orders/deal here on Forex and leave any specific stock market situation to a new topic.

[Ubzen]

tenlau: I notice an strange behavior/display of the EA's log. According to all documentations a SELL deal is done from BID price and a BUY deal from ASK price. But I notice that if I Print() the MqlTick() .last structure, what  is printed/displayed is always the BID price doesn't matter if it was a SELL or BUY deal. What is the explanation for this 

Traditionally "Mql Prices" are Bid Prices. This probably explains why you're always seeing the Bid.

If you want to see Ask_Price, you use the Ask predefined variables or the equivalent SymbolInfo().

The above is usually a manifestation of the Bid + Spreads.