Why is the currency rate different?

New comment
 

Why is the currency rate different?

I checked in the central bank and it turns out that the rates are different, why?

Can anyone explain this to me?

MT5

ECB

 
Depends whether your broker is ECN or market maker. ECN is largest liquidity pool. But banks do not necessarily cling to it. Forex market is sort of cluttered, there are many spots where a pair is quoted. Even big indices like Dow are not quoted the same way. Brokers may call it DJI30, WS30, USIND like that, and they pretend it's The Dow, but under the hood it is all mimicked, time-lagged and smoothed out, and they may treat you like they will if it comes to terms. There's even no guarantee that you will be served the price you've seen in the chart.
 
lippmaje:
Depends whether your broker is ECN or market maker. ECN is largest liquidity pool. But banks do not necessarily cling to it. Forex market is sort of cluttered, there are many spots where a pair is quoted. Even big indices like Dow are not quoted the same way. Brokers may call it DJI30, WS30, USIND like that, and they pretend it's The Dow, but under the hood it is all mimicked, time-lagged and smoothed out, and they may treat you like they will if it comes to terms. There's even no guarantee that you will be served the price you've seen in the chart.
Oh, thank you, I understand now,i.e. only ECN because it sends orders to banks, the others are ordinary fake and gambling type?
 

Market makers under the hood classify customers into two categories. You start with A, the loser class, where you are expected to make loss on long terms. This is also where you start in demo. Here you'll always get the chart's bid and ask, respective to your lag of course. So if you open a position at 21:00:00,000, say, they serve you the chart's quote from 21:00:00,375 (ping 50 ms + some server processing lag). This may be in your favour or against it (aka slippage). Should you turn out to be profitable this way, and about 80% are not, your broker is likely to put you into class B. This is the time the broker begins to take you serious, and so will hedge your position. And guess what happens to your slippage thereafter.

ECN: As far as I know it's a conglomeration of liquidity providers, not necessarily banks, just all kinds of institutions. Think of a worldwide network, a web inside the web all cobbled together with fiberglass. Banks may or may not follow quotes from it. Eventually they do, but ECN is lightning fast. This is what scalpers aim at, providing a bridge between fast and slow liquidity pools. ECN brokers usually work with commissions but low spreads. This is all I know as I don't have experience with it, but you're free to receive more opinions of course. To add some grain of salt, I've read that 96% of Forex traders eventually lose.

https://www.thebalance.com/why-do-forex-traders-lose-money-1344936

 
lippmaje:

Market makers under the hood classify customers into two categories. You start with A, the loser class, where you are expected to make loss on long terms. This is also where you start in demo. Here you'll always get the chart's bid and ask, respective to your lag of course. So if you open a position at 21:00:00,000, say, they serve you the chart's quote from 21:00:00,375 (ping 50 ms + some server processing lag). This may be in your favour or against it (aka slippage). Should you turn out to be profitable this way, and about 80% are not, your broker is likely to put you into class B. This is the time the broker begins to take you serious, and so will hedge your position. And guess what happens to your slippage thereafter.

ECN: As far as I know it's a conglomeration of liquidity providers, not necessarily banks, just all kinds of institutions. Think of a worldwide network, a web inside the web all cobbled together with fiberglass. Banks may or may not follow quotes from it. Eventually they do, but ECN is lightning fast. This is what scalpers aim at, providing a bridge between fast and slow liquidity pools. ECN brokers usually work with commissions but low spreads. This is all I know as I don't have experience with it, but you're free to receive more opinions of course. To add some grain of salt, I've read that 96% of Forex traders eventually lose.

https://www.thebalance.com/why-do-forex-traders-lose-money-1344936

from a logical point of view, there is no other institution, there are only banks ,any money must go through the bank ,unless it's illegal, something like a black market, any financial institution but not a bank, MUST operate with banks, each transaction MUST be performed by the bank, so I do not understand you're writing, all the money is in banks

 
I checked the course today in ECB and to my surprise, today's rate ECB corresponds to yesterday's MT, it looks like ECB displays delayed rates.
I am a beginner and I try to understand all aspects of the how its work.
 
Damian Dervil:

from a logical point of view, there is no other institution, there are only banks ,any money must go through the bank ,unless it's illegal, something like a black market, any financial institution but not a bank, MUST operate with banks, each transaction MUST be performed by the bank, so I do not understand you're writing, all the money is in banks

Yes, but what I meant is if you sell a position, someone on the other side of the net will eventually buy it, and that does not need to be a bank. Could be anyone also connected to ECN. A Soros trust maybe, who knows. Or a forex broker. You are not necessarily buying from or selling to a bank. But I'm new to this, it's just my understanding of what I read so far.
New comment
Reason: