Hi please can anyone tell me that where the forex price data comes from? I mean I saw in some forex broker’s MT4 price is something (false breakout) and when I did look other broker’s MT4 there was no high volatility. When I contacted to my broker to know why the price was so up and down they replied that every broker has different liquidity provider hence data on MT4 is different broker to broker. I really could not understand how data cab be different for same currency pair at the same time. I lost big amount of money due to this. I’d be very glad full if anyone can provide answer (especially senior and old mamber of this forum ) thanks in advance pls reply soon.
The Short Answer: Every broker gets its prices from liquidity providers. These liquidity providers are usually big banks that mostly account for more than 70 percent of the share. However, this is not a rule of thumb.
Brokers also rely on smaller banks and other sources for liquidity. If your broker is allowing you to access the market directly , it is entirely possible that you are also a liquidity provider as whatever you sell is bought by others and vice versa. Here is a brief overview: https://en.tradimo.com/tradipedia/liquidity-provider/
Hence, a broker may have different liquidity providers. For example Broker 1 has access to market where Bank A, Bank B and Bank C are potential providers. In contrast, Broker 2 is also accessing a similar market but with different configuration e.g Bank A, Bank B, Bank F, Bank G. In this example, two brokers have different liquidity providers.
I am sure this will help a bit. Thanks
Thanks for relpy UMAF it did work little. What I was trying to figure out is: Broker A has chat of (EUR/USD) different of almost 900 pippets at the same time as compared other brokers. how this is possible this was my question.
Yes, 900 pippets is really a big difference. Even on large news breaks (on EUR/USD) 200 pippets does not seem out of place but 900 is too much. I can also understand 900 pippets on exotic pairs under abnormal conditions.
If 900 pippets is under normal market conditions, I am really surprised. Theoretically, your broker is right in suggesting that this can be the liquidity provider. However, it is alarming on EUR/USD. Imagine what can happen on other pairs. This really requires some investigation. Even stop-hunting theory is not out of place. Anyway, let us know and any additional info (number of lots traded etc) will help us evaluate further. Thanks
I have heard about other brokers having this spike while some don’t. I have never experienced this with Profiforex, but when I do, I am really going to find out how and why it happened. I think you should ask your broker to give you some real explanation. And if they say it is normal, I think you should go elsewhere to do business. I am sure a trader would lose big if a position is open during the time it happened.
Thanks for reply but I am still waiting for my answer that is where the mt4 data comes from??? I even did chated with forex.com and they did not reply of this question. 90 pip difference in same currency same time not possible. Even if liquidity providers is differ this is very big difference.
MT4 data comes from Metaquote itself. Now, every broker have their own liquidity provider. In most cases, a broker or liquidity provider can choose to widen it’s price quote whenever possible. So, this is why you should mind the broker you use. I have not had any problem like this with my broker, and it is an offshore broker.