I noticed that the eur/usd has been bullish. So, I decided to place a buy instant execution position because I believed it will continue to be bullish. I noticed something about the mt4 I am using which I will like someone to clarify me on. I thought that the system would credit me at the actual amount that was shown on the chart, i.e the actual buy amount. But when I placed the order, I noticed that there was a 2 pips lag. That is, I instantly got 2 pips against me in seconds when it should have been 0 or even a positive number. Why the lag? I would like to know because I want to know if my broker is reliable or not. Thanks
All brokers quote two prices - one at which you buy, the ask price, and the other the price at which you sell (or short), the bid price. The difference between the two is called the spread. Most charts are drawn using the bid price. If a chart is drawn using another price it will say so with a label - some charts use the mid-price, which is the average of the bid and ask prices.
It is like the difference between the buy price and the sell price in a shop. If you want to buy bread at the shop the shopkeeper will charge you more for the loaf than he paid. If you have made a loaf of bread and want to sell it to the shop, the shopkeeper will offer you less than what he charges the customers when he has bought your bread. Otherwise, how could the man live?
A 2 pip spread on EUR/USD sounds a lot. Bigger spreads like this can make a big difference to profits if you are daytrading. Check some other brokers for better quotes.
This called a spread. A difference between a Buy price and a Sell price. When you Buy any pair, you buy at an Ask price, when you sell, you sell at a Bid price. That is how brokers get their money (mostly). However, there is a big number of brokers offering tiny to zero spread for pairs like EURUSD, but the charge commissions for each operation.