Im a still new to trading and learning a great deal every day. Im based here in Japan and found out that their closing and opening prices are different from others. How’s that even possible?
Can you be more specific?
“their” – who are “they”
“closing and opening prices” – on which time frame? hourly? daily? weekly?
“others” – who are these others?
I traded the same currency pair with a brokerage firm in Cyprus and a local one here in Japan. I woke up to find out that EUR/USD had two different closing prices.I m using the daily time frame. I thought closing prices are uniform all over the world?
Stupid regulations here forbid us to trade directly with parent and established brokerage firms like Oanda. We need to trade with the the local company here. And everything from minimum deposit(450k) to leverages are totally different. And now different closing prices? Im having a hard time finding a trustworthy and reliable firms I can trade with. I have been told about Alpari,Hostforex,XM. I was impressed with the tons of negative comments I found out about them,especially the XM.
If you go to Oanda and FXCM main pages for example and type in Japan,it will auto instruct you to fill a different form. Its beyond frustrating at best
That’s not true, for two reasons.
(1) Most brokers are market-makers, meaning that they set their own BID and ASK prices based on the best available prices offered to them by their liquidity providers. Two brokers in distant parts of the world may be getting their (wholesale) prices from different groups of liquidity providers (banks). Accordingly, at any given moment, the best BID and the best ASK available to broker #1 might be different from the best BID and ASK available to broker #2.
Then, being market-makers, these two brokers will create retail BID and ASK prices, which they will offer to you (the retail customer), by marking-up the wholesale BID and ASK prices from the bank. This marking-up involves subtracting pips (or fractions of a pip) from the wholesale BID price, and adding pips (or fractions of a pip) to the wholesale ASK price. These mark-ups represent profit for the brokers, and typically vary widely from broker to broker.
All the prices you see on a broker’s platform (including the daily opening and closing prices) are marked-up retail prices. Different prices displayed by different brokers are the result of different mark-ups.
One more point: Charts display either BID prices or ASK prices, as determined by the user of the charts. When comparing prices between brokers, be sure to compare BID price to BID price, or ASK price to ASK price.
(2) Each broker decides for itself when the “forex day” will end, and a new “forex day” will begin. The time chosen may or may not match the time chosen by another broker. Many (but, not all) brokers use the end of the business day in New York (5 pm New York time, 9 pm or 10 pm GMT depending on daylight saving time in New York) as the “close” of the forex trading “day”. But, other brokers use other times, such as midnight local time, or midnight GMT, as the time at which they close one daily candle and open the next daily candle.
Obviously, opening and closing daily candles at different times of day will result in different opening and closing prices.
Some additional time-frame info
All brokers worldwide open and close hourly candles at exactly the same time. As a result, the candles on all the smaller time-frames (30-minute and lower) open and close at exactly the same time, as well.
But, on time-frames from 2 hours to 12 hours, candles are synchronized with the broker’s daily candle closing time. Example: a broker that closes daily candles at 5 pm New York time will close 4-hour candles at 5 pm, 9 pm, 1 am, 5 am, 9 am, and 1 pm. But, a broker that closes daily candles 2 hours later, at midnight GMT, will close all of their 4-hour candles 2 hours later, as well.
All brokers, regardless of where they are located, open and close weekly and monthly candles at exactly the same time. But the prices displayed on those candles may differ from broker to broker for the reasons discussed in (1) above.
One of the challenges in trading a worldwide market is that languages, customs, regulations and times vary from place to place. As for times, as you go around the globe, there are 24 hourly time-zones plus several half-hourly time-zones. It’s essential for a trader to know his broker’s time-zone (meaning, generally, where the broker’s servers are located). All of the times displayed on that broker’s charts will be based on that time-zone.
I can’t thank you well enough for your detailed and thoughtful response.It’s frustrating when you are making money with one brokerage firm and losing with your local one with the exact same trade.
I have got one more favor to ask of you. Which broker besides Forex.com and Oanda would you recommend?
Brilliant response from Clint.
Here’s a note that will apply to very few traders but worth looking out for. As well as the broker’s charts, I access a subscription chart package called Sharescope. The Sharescope edition I use gives daily prices (OHLC) only. However, I note that the daily high, low and close prices can vary - if I open the programme at 1730hrs London time, it gives me for example the forex high, low and close prices for that day as of 1630 London time. If I re-open the programme at 2200, it gives me later prices: when I open the programme the next morning, it gives me the last prices of the day’s session globally. Won’t affect many but worth watching for if you use alternative charts.
That’s the case! On the other hand, trading session is another parameter that I see, you used as 2nd point! Great job.
Could you mind answering my follow up question regarding broker choice?
You have identified yourself as an expat living in Japan. You haven’t said what your nationality is, but I’m guessing (partly by your impatience) that you’re an American. If that is the case, you will find (if you haven’t found out already) that you are not welcome at most of the brokers in the world.
The attitude of those brokers can be characterized this way:
You’re an American. Go away. We don’t want anything to do with you. It’s nothing personal.
It just has to do with the threats, the intimidation, and the endless reporting directed at us
by your government.
We don’t care that you live in Japan. We wouldn’t care if you lived here in our country.
We just don’t want to be bothered with you. So, go away.
If this describes your situation, then you might find our Offshore Broker List to be a good place to start your search for a broker who will welcome you.
We have been working on this List for 10 years. All of our findings are summarized in the first 5 posts in our thread. Five of the brokers we have vetted have been designated as Trusted Brokers. You can learn all about that designation by following a few links in post #1.
Our Offshore Broker List is a starting point for the due diligence that only you can do for yourself
in screening, sifting, and vetting the brokers you choose to investigate.
Thanks a million for your precious time,much appreciated. I would like to buy you a coffee for your great efforts!