Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

skipcube

Why Are 3rd Party Datafeeds Recommended?

Recommended Posts

Hi,

I'm learning to start trading forex. I'm not sure I understand why I need to invest in a reliable datafeed that is not provided by the forex broker.

 

For this case, lets say the broker is truly routing the orders to his network of banks.

 

Since forex is traded "off exchange", I'm naively thinking the price given by the broker's feed is the best executable price possible.

 

Or is there more to that? How does a 3rd party datafeed help here? Even though it may be reliable and fast, possiblity of order being filled by the broker and its network would be smaller?

 

Partly, I see external datafeed's value for exchange based trading. But I'm having a hard time understanding their value for forex. Please throw in your 2 cents.

 

Sorry if this has been asked before. Google search didn't turn up much.

 

-Skip.

Share this post


Link to post
Share on other sites

After looking some more, looks like third party pricing data feeds are very hard to evaluate -mainly because the broker's liquidity network may or may not be able to execute on the orders. To this end, is there a trading strategy that needs a secondary feed?

Share this post


Link to post
Share on other sites
there is nothing wrong with the data feed from the brokers. imho...

 

just want to add something...

remember that data may be different from one to another...if you are going to automate a strategy and trade live, use your broker's data feed to test it...

Share this post


Link to post
Share on other sites
Partly, I see external datafeed's value for exchange based trading. But I'm having a hard time understanding their value for forex. Please throw in your 2 cents.

 

Skip, your post is 100% correct in every way. You seem to understand how orders work in the forex interbank market, versus an exchange, which is to say that you are more knowledgeable than 90% of your forex peers. Your broker's price that he quotes you is THE price. Another broker may quote another price, or a data feed may reflect a different set of prices, but that does not matter. In the forex world, you get what you are quoted, and in forex there is no real price.

Share this post


Link to post
Share on other sites

most Forex brokers that are avalible to small traders are using their own market, meaning they create a market out of the real interbank market by tweaking the quotes a little in their favor, usually what they do is marking up the spread, if they are using the straight trough processing model, the dealing desk brokers might tweak the quotes even more in their favor, so much that it directly will put the client in disadvantage, ECN's are taking their quotes from the interbank, it then goes into a pool of clients together with the brokers liquidity providers, it's somewhat like a internal TCP network, this is most often if not allways other brokers who states as liquidity providers, ofcourse they would not sell anything unless it favors them so it can be discussed if this is a real true ECN model since the price comes from the liquidity providers, not the liquidity providers clients, note that the liquidity providers are brokers to and note that this is only FX, there is no way we as small clients can trade on the interbank Fx unless we have millions to trade with. the quotes that most recembles the real interbank quotes are from the ECN and STP and DMA model, they are the most stable and is very near the interbank quotes. there is also a new thing called DMA which is aprox the same as STP and ECN together, out of these the best in order is DMA, ECN, STP, dealing desk, there is outside sources line Kinetick, eSignal and others you can subscribe to on a monthly basis, they are the real thing but unless you can trade directly through the platform using these feeds they are not much of use to you. in that case they are just for comparison to other feeds, with most Forex brokers you are forced to use the brokers feed, especially STP brokers because they earn money from the spread so you would still pay the spread no matter what feed you are using. with equity and stock brokers you can use whatever data feed you want, this goes for stocks eft's options futures etc, these are traded on the real quotes, there are no markups or other tweaks made to the feed, they are traded on the exchanges around the world so the datafeed you would get from this kind of broker are very exact from the begining so an external datafeed would not be of interest unless the broker don't have a own feed, in that case you are forced to subscribe to an external feed. hope that helps:)

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • DELL Dell Technologies stock, good day moving higher off the 90.99 double support area, from Stocks to Watch at https://stockconsultant.com/?DELL
    • MCK Mckesson stock, nice trend and continuation breakout at https://stockconsultant.com/?MCK
    • lmfx just officially launched their own LMGX token, Im planning to grab a couple of hundred and maybe have the option to stake them. 
    • Date: 2nd April 2025.   Market on Edge: Tariff Announcement and Volatility Ahead!   The US economic and employment data continues to deteriorate with the job vacancies figures dropping to a 5-month low. In addition to this, the IMS Manufacturing PMI also fell below expectations. However, both the US Dollar and Gold declined simultaneously following the release of the two figures, an uncommon occurrence in the market. Traders expect a key factor to be today’s ‘liberation day’ where the US will impose tariffs on imports. USDJPY - Traders Await Tariff Confirmation! Traders looking to determine how the USDJPY will look today will find it difficult to determine until the US confirms its tariff plan. Today is the day when Trump previously stated he would finalize and announce his tariff plan. The administration has not yet released the policy, but investors expect it to be the most expansionary in a century. President Trump is due to speak at 20:00 GMT. On HFM's Calendar the speech is stated as "US Liberation Day Tariff Announcement". Currently, analysts are expecting Trump’s Tariff Plan to impose tariffs on the EU, chips and pharmaceuticals later today as well as reciprocal tariffs. Economists have a good idea of how these tariffs may take effect, but reciprocal tariffs are still unspecified. In addition to this, 25% tariffs on the car industry will start tomorrow. The tariffs on the foreign cars industry are a factor which will particularly impact Japan. Although, traders should note that this is what is expected and is not yet finalised. Last week, President Trump stated that he would implement retaliatory tariffs but allow exemptions for certain US trade partners. Treasury Secretary Mr Bessent and National Economic Council Director Mr Hassett suggested that the restrictions would primarily target 15 countries responsible for the bulk of the US trade deficit. However, yesterday, Trump contradicted these statements, asserting that additional duties would be imposed on any country that has implemented similar measures against US products. The day’s volatility will depend on which route the US administration takes. The harshness of the policy will influence both the Japanese Yen as well as the US Dollar.   USDJPY 5-Minute Chart   US Economic and Employment Data The JOLT Job Vacancies figure fell below expectations and is lower than the previous month’s figure. The JOLT Job Vacancies read 7.57 million whereas the average of the past 6 months is 7.78 million. The ISM Manufacturing Index also fell below the key level of 50.00 and was 5 points lower than what analysts were expecting. The data is negative for the US Dollar, particularly as the latest release applies more pressure on the Federal Reserve to cut interest rates. However, this is unlikely to happen if the trade policy ignites higher and stickier inflation. In the Bank of Japan’s Governor's latest speech, Mr Ueda said that the tariffs are likely to trigger higher inflation. USDJPY Technical Analysis Currently, the Japanese Yen Index is the worst performing of the day while the US Dollar Index is more or less unchanged. However, this is something traders will continue to monitor as the EU session starts. In the 2-hour timeframe, the USDJPY is trading at the neutral level below the 75-bar EMA and 100-bar SMA. The RSI and MACD is also at the neutral level meaning traders should be open to price movements in either direction. On the smaller timeframes, such as the 5-minute timeframe, there is a slight bias towards a bullish outcome. However, this is only likely if the latest bearish swing does not drop below the 200-Bar SMA.     The key resistant level can be seen at 150.262 and the support level at 149.115. Breakout levels are at 149.988 and 149.674. Key Takeaway Points: Job vacancies hit a five-month low, and the ISM Manufacturing PMI missed expectations, adding pressure on the Federal Reserve regarding interest rate decisions. Traders await confirmation on Trump’s tariff policy, which is expected to impact the EU, chips, pharmaceuticals, and foreign car industries. The severity of the tariffs will influence both the JPY and the USD, with traders waiting for final policy details. The Japanese Yen Index is the worst index of the day while the US Dollar Index is unchanged. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news.   Michalis Efthymiou HFMarkets   Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • HLF Herbalife stock, watch for a bull flag breakout above 9.02 at https://stockconsultant.com/?HLF
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.