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Why does MT4 show bid prices instead of close?

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Samuel Beer
417
Samuel Beer  

Hi guys,


The question is in the header. I thought the price was the last price where buyers and sellers met, more specifically, where bid and ask prices crossed over and a turnover of "shares" happened. Now in MT4 apparently those are the Bid prices. I understand that CFD's are not exactly shares but I thought the process was about the same. So what's the difference can somebody explain?


Thanks! :)

whroeder1
17092
whroeder1  

There is no difference. Bid and Ask never cross on any market.

The Bid is the highest price of all buyers, and Ask is the lowest price of all sellers.

If a transaction occurred either the buy accepted the Ask, or a seller accepted Bid. Ask and Bid became equal, that price is the close.

The Ask and Bid are then adjusted to the next closest buyer/seller.

Samuel Beer
417
Samuel Beer  
whroeder1:

There is no difference. Bid and Ask never cross on any market.

The Bid is the highest price of all buyers, and Ask is the lowest price of all sellers.

If a transaction occurred either the buy accepted the Ask, or a seller accepted Bid. Ask and Bid became equal, that price is the close.

The Ask and Bid are then adjusted to the next closest buyer/seller.


Thank you.


You say Bid and Ask are then adjusted to the next closest buyer/seller. But wouldn't that imply that close is not equal to the Bid thereafter (except if the Bid isn't filled with enough sellers to move price)?


Could it have something to do with my broker model? I have a dealing desk broker.

whroeder1
17092
whroeder1  

RichPiano:

You say Bid and Ask are then adjusted to the next closest buyer/seller. But wouldn't that imply that close is not equal to the Bid thereafter (except if the Bid isn't filled with enough sellers to move price)?

Could it have something to do with my broker model? I have a dealing desk broker.

  1. I implied nothing. The close price of a exchange that results in a tick has nothing to do with Close[0] which equals Bid always.
  2. What is "it?" There are no mind readers here.
Alain Verleyen
Moderator
35129
Alain Verleyen  
RichPiano:

Hi guys,


The question is in the header. I thought the price was the last price where buyers and sellers met, more specifically, where bid and ask prices crossed over and a turnover of "shares" happened. Now in MT4 apparently those are the Bid prices. I understand that CFD's are not exactly shares but I thought the process was about the same. So what's the difference can somebody explain?


Thanks! :)

CFD and shares are totally different. The process is not the same.

What do you mean by "MT4 show bid price instead of close" ?

Alain Verleyen
Moderator
35129
Alain Verleyen  
whroeder1:

If a transaction occurred either the buy accepted the Ask, or a seller accepted Bid. Ask and Bid became equal, that price is the close.

What do you mean ? Ask and Bid are never equal.

The Ask and Bid are then adjusted to the next closest buyer/seller.

After 1 transaction, either Ask is adjusted or Bid, but not both.

whroeder1
17092
whroeder1  

Of course they become equal, or no transactions can ever occur.

After the trade, Ask become the lowest sell price and Bid becomes the highest buy price. Either or both may be adjusted. The two in the most recent trade are gone. All that is left is everyone else.

Alain Verleyen
Moderator
35129
Alain Verleyen  
whroeder1:

Of course they become equal, or no transactions can ever occur.

After the trade, Ask become the lowest sell price and Bid becomes the highest buy price. Either or both may be adjusted. The two in the most recent trade are gone. All that is left is everyone else.

I think you are wrong, but I am really not interested by a dispute. So let see if someone else want to argue or is interested in this discussion.
Samuel Beer
417
Samuel Beer  
Alain Verleyen:
I think you are wrong, but I am really not interested by a dispute. So let see if someone else want to argue or is interested in this discussion.

I think it really depends on the broker. If it's a market maker with fixed spread, then Bid and Ask are never equal. But in the open market, they have to become equal for a short time in the order book, otherwise there is no commen price at which a deal can be made. E.G. when i buy market i will enter my position at the ask price, posing an opportunity for all sellers lined up behind this price to sell their "shares" to me.

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