What is a PUPPET? - page 2
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In general, the absence of the 5th digit is the first sign that you have encountered a kitchen. The average trader does not care about the 5th digit of course, but cutting off the real quotes is already a fraud.
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Maybe the other way around? So that service doesn't seem like a dream. It's for advertising, if they say 20 pips spread, it's very unattractive.
The author is not shouting at the kitchen, besides Alpari is not a kitchen for several years, which is not the case with the competitors.
Imagine a beginner who has come to earn on Forex (voluntarily give up all his savings). He has a choice. On the one hand the 4-digit kitchen says that its spread is 3 points, on the other side Alpari with 5 digits says that its spread is from 0 to 20 points.
In general, the lack of a 5th digit is the first sign that you have run into a kitchen. For an ordinary trader it doesn't matter what the 5th digit is, but cutting off the real quotes is already a fraud.
Conclusion: Point - the minimum change in the instrument price - the last sign (the 5th for most currency pairs, the 3rd for JPY). Normal companies are forced to talk about 4 digits because abnormal companies deceive their clients by cutting off quotes.
If you do not know the difference between the spread and the price you have to pay to get the best price, you cannot ask for it, you cannot ask for a fixed spread. The Ask and Bid prices are the nearest limit orders of other market participants, there is no ban on placing a limit order inside the spread and thus narrowing that spread. Again, if you are prohibited from placing limit orders within the spread, this is guaranteed to be a kitchen.
Frankly speaking about the spread, I have my doubts. Since Forex is an interbank market without a regulator, where does the spread come from? The spread can only be screwed by the regulator (as payment for its services) and for us it is a dealer! So the spread can be either floating or fixed. Or am I wrong? And the fifth digit is screwed in to get a fractional spread and it is screwed in exclusively by dealers. And because the input quotes differ in 4 and 5 digits respectively, that's where the confusion begins. For us the point is the fifth digit, and for them it is 4.
The term point is probably 300 years old and has nothing to do with forex.
The spread is the difference between the price of a willing seller and a willing buyer and cannot be less than a point, and the size is determined by the market. On regulated markets, the ask and bid prices are the same for all participants at a given time. On kitchen markets, i.e. unregulated markets, the spread between 2 participants is their own business.
_ this is where the confusion begins.
They just don't want to put in 5-digit quotes. Like, everything is fine as it is. Especially when you consider the size of the minimum lot.
Have you read their documents carefully? What legal relation to the bank are the offices with which the forex contract is concluded? :)
The term point is probably 300 years old and has nothing to do with forex.
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and it has nothing to do with forex.