Forex (abbreviation for the Foreign Exchange) is one of the largest financial markets in the world. It is a market that allows investors to trade currencies and other financial instruments such as stocks, bonds, commodities, and indices.
The currency market is decentralized because there is no central exchange where forex is traded. This means that there are many different trading platforms available to buy and sell currencies. It also creates the possibility of its price being widely varied on different platforms.
Why do Different Forex Brokers Have Different Prices?
Since the Forex market is an un-centralized exchange, all brokers are not set up to provide the same volume of liquidity, traders, or rates of spreads. This means that while brokers may be very similar in functionality and service, they will all have different offerings and spreads.
Brokers are always looking for a way to provide competitive pricing to their clients. One way they can do this is by providing the liquidity providers with different pricing. However, different liquidity providers provide them with different pricing and the brokers receive their own profits at this price.
When a broker has sourced their liquidity to fulfill your trade they will often mark up the price to generate profits for themselves. This markup is known as the ‘spread’ and is where the broker makes money. Spreads can differ depending on the product you are trading. There are many ways brokers can increase their spread with traders.
Markups can depend on the market, time of day, and the exchange where you are trading. It is important to note that brokers are not required to disclose their markup and this can lead to confusion for traders.
When you trade with an exchange, you should be aware of what your broker is doing with the order book and how much they are charging for it.
Where Do Forex Brokers Get Prices?
The price of a currency is determined by the market. The market in this case refers to the trading of other currencies.
Forex brokers are the most popular means of trading in the foreign exchange market. They provide a platform for investors to buy and sell currencies.
Forex brokers are able to provide prices for their clients because they have access to the prices of other FX participants, usually banks and other non-bank financial institutions.
Why Do Different Brokers Have Different Charts?
Brokers need Data Feed to create charts accordingly to make them readable for humans. However, they might use different types of data from other sources. Therefore, it is common that the charts they make appear to be different.
Different brokers use different data feeds to provide the information on their charts. Some of them use a single data feed while some may provide a variety of data feeds for different purposes.
Brokers that use a single data feed typically have just one chart and are not as customizable as those that use multiple data feeds. The more customizable charts provide more opportunities for traders to customize their charts and analyze the market in different ways.
Final Remarks
Despite there being a huge demand for forex trading, it can be difficult to navigate starting, especially as a beginner.
Trading Forex is a highly risky investment. You can lose everything you invest in the currency market that doesn’t exist in your favor. This means that Forex traders must have a lot of patience and have to take risks to reach their goals.
