Why do charts lie?

Beginner Questions
#1

Hi,
I noticed that the trading software that I use (from fxcm.com, I hear it’s one of the best) shows one value when I go to buy for instance eur/usd and another value (open value) is shown in the charts bar(1 minute bars). For example I never saw in the buying menu a difference between buy/sell prices less than 10 pips, even when on the chart a 0 bar appeared (buying price = selling price ). OK , I’m not implying that the software I use isn’t good, not at all; I tried another one from fxsol.com, and the same result appeared. The Price you actually buy a currency isn’t equal to the price shown on the bar chart. Who can invest in forex when the tools we use are telling us different versions of the “truth”.

I’m interested if anyone can explain to me why this happens?? where can I find Charts with the real buying and selling prices??

Thanks

#2

Do you understand what your provider is charting for you? It is usually the bid (sell) price. You therefore have to add the spread to this to obtain the ask (buy). However this is not always so. Oanda charts the midpoint between the 2 on its default chart although does provide a min/max to see the effect of spread. Dukascopy allows you to set which you want to see and on a tick chart shows you the spread. In effect then you need to be clear what it is that you are looking at. Needless to say because there is no central market as such you cannot use the chart feed from any other provider to make your buy and sell decisions and need to stick to your trading platform for that

#3

Sooo, the values in the charts are always between the bid and the ask?
About Oanda Charts, your saying that the min/max on they’re charts reflect the prices reached by the highest bid price and the lowest ask price.
I’m asking this because It’s hard to develop a strategy when you cannot test it on real charts.
I’m assuming that when I place a stop the specific software used searches for the bid/ask value and not the open/close value in the chart to close the transaction???That’s why it’s so important to know the real values used.

Thank you

#4

Yes exactly and with regard to your other point that is why strategies developed on charts and demo accounts often do not work in real life where delay, slippage, execution problems and the like always go against you. In other words if it works in demo it may not in real life but if it doesnt work in demo then it definitely wont in the market

#5

Thank you for your answers, you’ve been a tremendous help.
Well I guess I’ll go testing my strategy.
P.S. I know it’s silly, because if there were a strategy that could win pips, everybody would win or at least the richest men on earth wouldn’t go to all that trouble for as little as 30-40% of they’re fortune, but I’m really curios to see what happens. Of course only on demo accounts.:slight_smile: