Broker said Bloomberg and Reuters Tick Chart is incorrect | Forex Factory

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Broker said Bloomberg and Reuters Tick Chart is incorrect

  • #1
  • First Post: Aug 22, 2013 3:21am Aug 22, 2013 3:21am
Hi everyone,

I have had issues with my broker which had price deviation from the correct bid and ask price, I have showed that there were 3-5 pips (30 - 50 point) price deviation on the Bloomberg and Reuters tick chart as I was trying to tell them that I'm having issues with their prices, they told me that Bloomberg is simply incorrect and cannot be used as a reliable source of information to dispute the validity of prices as every price is calculated within the "Broker's" method and apparently Bloomberg has a "Bloomberg" method.


Any thoughts?
  • #2
  • Aug 22, 2013 4:09am Aug 22, 2013 4:09am
time to find a new broker
  • #3
  • Aug 22, 2013 4:18am Aug 22, 2013 4:18am
i posted this then deleted it because wasn't sure if it answered your question. but here it is anyway.

here's how it works in general.

1) broker subscribes to a price/trade feed from a liquidity provider
2) in back office side of the trading platform, broker sets a spread based on instrument
3) you see this spread in the platform (e.g. price feed from LP has bid/ask of 1.0/1.1; you see and trade 0.9/1.3)
4) this is how they make money. and usually you already agree on the spread amount when you open the account.

so using an outside data source would not be accurate because the broker needs to manipulate data (from whatever LP they use) in order to make money.
  • #4
  • Aug 22, 2013 4:32am Aug 22, 2013 4:32am
Quoting cloudstr1f3r
Hi everyone, I have had issues with my broker which had price deviation from the correct bid and ask price, I have showed that there were 3-5 pips (30 - 50 point) price deviation on the Bloomberg and Reuters tick chart as I was trying to tell them that I'm having issues with their prices, they told me that Bloomberg is simply incorrect and cannot be used as a reliable source of information to dispute the validity of prices as every price is calculated within the "Broker's" method and apparently Bloomberg has a "Bloomberg" method. Any thoughts?...
adam, has covered some parts for you, but also to consider....

bloomberg & reuters will get there prices as best price across a spread of the biggest LPs. so if your broker pricing is different it could be:

1. As adam said broker spread
2. Make sure you are comparing like for like, bloomberg etc. may be quoting bid, ask or mid prices so just make sure which you are checking against. you want mid or bid, if mid you can make an allowance for the broker spread to see
3. Your broker may not have direct access to LP, ie: they may use another broker or something themselves - white label etc. and therefore your spread maybe greater than you think as it hides another spread markup.
4. your broker maybe using a single and/or small LP with poor liquidity and therefore different prices often

whichever it is you have to remember:

1. FX pricing is not centralised - there is no single price point at any given time, if your broker LP has offers at 1.3001 but bloomberg 1.2998 your broker will only sell at 1.3001 etc (point 4 above)
2. If your broker is quoting different to bloomberg etc. but all the time, you can probably still work with it
3. If your broker randomly deviates significantly I would get a new broker
4. You will never win an argument with a broker over a few pips the market pricing is too vague to do so.
  • #5
  • Aug 22, 2013 5:08am Aug 22, 2013 5:08am
Quoting MaxDoom
{quote} adam, has covered some parts for you, but also to consider.... bloomberg & reuters will get there prices as best price across a spread of the biggest LPs. so if your broker pricing is different it could be: 1. As adam said broker spread 2. Make sure you are comparing like for like, bloomberg etc. may be quoting bid, ask or mid prices so just make sure which you are checking against. you want mid or bid, if mid you can make an allowance for the broker spread to see 3. Your broker may not have direct access to LP, ie: they may use another...

Ok thank you Adam and Max.

1. This broker uses the biggest LPs the the world too, the biggest banks in the world, hence, I could actually view it on the Tick Chart who contributed what price and they are out of line between the broker's and the LPs. The spreads are actually floating and not fixed.
2. I have looked at this using the Ask price and not the bid price, so the spread had been taken into consideration already, as the bid price is the market up of the current market price.
3. They claim to have direct access to the biggest LPs in the world, so that's something we should discuss and have a look into if possible.
4. It's not a small LPS, nor a poor liquidity provider, it's top banks around the world.

Reply to your pointers:
1. Of course it's not centralised, but if it is from 15 banks, it won't deviate by too much.
2. You can work with them, but that does not explain why their LPs are significantly different as they promised to give the best prices available from the 15 of them.
3. It doesn't just deviate, it freezes at times. I have gotten a new broker, but this is something which I should look closely into.
4. It's not on instance, it's 20 of them.
  • #6
  • Aug 23, 2013 4:19am Aug 23, 2013 4:19am
Very interesting situation! If possible..
-could you please say who this broker is?
-which instruments did you experience this problem with?
-which platform are you using?


Also, what do you mean by direct access? Do they work with the STP model?
  • #7
  • Aug 23, 2013 8:46am Aug 23, 2013 8:46am
Quoting adam.w
Very interesting situation! If possible.. -could you please say who this broker is? -which instruments did you experience this problem with? -which platform are you using? Also, what do you mean by direct access? Do they work with the STP model?
Would not say the broker as it is in dispute.
Instrument happened only on the pairs I was trading, where there was a 8 pip deviation one time apparently there were 0 indicative quotes from 15 banks.
Platform was MT4

They claim they are STP, with a "No dealing desk", but executions took long as hell.
  • #8
  • Aug 23, 2013 9:40am Aug 23, 2013 9:40am
Quoting adam.w
Very interesting situation! If possible.. -could you please say who this broker is? -which instruments did you experience this problem with? -which platform are you using? Also, what do you mean by direct access? Do they work with the STP model?
DMA meaning that the broker trades your position immediately with the banks, however, nah uh I do not believe DMA would take a minute at the most extreme times to execute a larger position.
  • #9
  • Aug 23, 2013 9:41am Aug 23, 2013 9:41am
Quoting adam.w
Very interesting situation! If possible.. -could you please say who this broker is? -which instruments did you experience this problem with? -which platform are you using? Also, what do you mean by direct access? Do they work with the STP model?
Also they claim to be an STP, but there are a lot of requotes. STP shall be sell or buy by market, with no requotes, it's just a joke.
  • #10
  • Aug 23, 2013 8:46pm Aug 23, 2013 8:46pm
Quoting cloudstr1f3r
Hi everyone, I have had issues with my broker which had price deviation from the correct bid and ask price, I have showed that there were 3-5 pips (30 - 50 point) price deviation on the Bloomberg and Reuters tick chart as I was trying to tell them that I'm having issues with their prices, they told me that Bloomb Any thoughts?
Time to move shop..which broker is this? And are they even aware of what they are talking about..never mind. As pointed out by others, it's time to go elsewhere..
  • #11
  • Aug 24, 2013 12:06am Aug 24, 2013 12:06am
Quoting Forexnuts
{quote} Time to move shop..which broker is this? And are they even aware of what they are talking about..never mind. As pointed out by others, it's time to go elsewhere..
Yeah of course it's time to go somewhere else, but just giving you guys a discussion on some of the ugly things which shops do out there. What was provided is exactly different from what was advertised in the public, made a complaint about the service, and they just threw me to their policies which is full of stuff saying "Abnormal market situations". I really want to tell them one thing, volatility is part of the market, it's not abnormal, whoever, can't cope with volatility in terms of execution, communications of servers or whatsoever, deserves to be fined by regulators and should shut down their shop immediately.
  • #12
  • Aug 27, 2013 1:29am Aug 27, 2013 1:29am
Fined, yes and you could try filing a formal complaint against the morons, but shut down, not likely. It would have been nice to see slop joints get shut down but they seem to operate just fine, even after hefty fines..so much for regulation..bleah.
Where the heck are they getting that 'volatility is abnormal' from? As mentioned before, this broker is one for the books, you could send some material to the CC, and try make some money out of it.
  • #13
  • Edited 4:07am Aug 27, 2013 3:02am | Edited 4:07am
Quoting Forexnuts
Fined, yes and you could try filing a formal complaint against the morons, but shut down, not likely. It would have been nice to see slop joints get shut down but they seem to operate just fine, even after hefty fines..so much for regulation..bleah. Where the heck are they getting that 'volatility is abnormal' from? As mentioned before, this broker is one for the books, you could send some material to the CC, and try make some money out of it.
Hi yeah, they said volatility moves like ECB is an "Abnormal market" situation and does not guarantee the validity of quotes or execution lol. Trading fundamental moves is part of how traders trade the markets, bleh. So much reasoning for a pile of crap.

What do you mean by CC? Sorry. If you're speaking of credit card, I didn't use one to deposit unfortunately.
  • #14
  • Aug 28, 2013 1:45am Aug 28, 2013 1:45am
I meant comedy central, they sure could use a few laughs..which is why I'd suggested the same. Believe me, the material that gets hosted on CC, some of it (not all) is based on real experience so you could give it a shot. As for the broker, flip him and walk away..
Look at it this way, now you know how some of these slop shops operate, so you can check the new brokers out and see if they fall under the same category.
And no, I certainly would not suggest using Credit card with your broker..and if I were to take a guess, they would probably hock the card info to 3rd party, you never know..
  • #15
  • Aug 28, 2013 1:50am Aug 28, 2013 1:50am
Quoting Forexnuts
I meant comedy central, they sure could use a few laughs..which is why I'd suggested the same. Believe me, the material that gets hosted on CC, some of it (not all) is based on real experience so you could give it a shot. As for the broker, flip him and walk away.. Look at it this way, now you know how some of these slop shops operate, so you can check the new brokers out and see if they fall under the same category. And no, I certainly would not suggest using Credit card with your broker..and if I were to take a guess, they would probably hock...
LOL seems like i'm not the only one thinking whatever was said was a joke
  • #16
  • Aug 30, 2013 5:46pm Aug 30, 2013 5:46pm
The case with Reuters, is that what you see isn't technically a deal able rate, merely an indicative quote from a brokerage therefore as the price is technically where something has traded a quote from a broker can't "100%" be seen as where the price has been

Below is an example quote from my terminal - Quotes aren't merged into Best bid-Best Offer like an ECN does and so you get each individual quote i.e. as you can seee Barclays, UBS and Commerz.

Therefore there is an argument that the prices seen here have never actually been met but merely an indication of what they see.

I hope this helps, any question feel free to ask as I probably haven't explained myself that well :/
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  • #17
  • Last Post: Aug 31, 2013 2:43am Aug 31, 2013 2:43am
Quoting JeremyWS
The case with Reuters, is that what you see isn't technically a deal able rate, merely an indicative quote from a brokerage therefore as the price is technically where something has traded a quote from a broker can't "100%" be seen as where the price has been Below is an example quote from my terminal - Quotes aren't merged into Best bid-Best Offer like an ECN does and so you get each individual quote i.e. as you can seee Barclays, UBS and Commerz. Therefore there is an argument that the prices seen here have never actually been met but merely...
Hi Jeremy,

But do realise one thing, quotes sent to brokers are not "liquidity" on how all brokers claim on their own MT4 platforms, all of the quotes sent to brokers are all indicative quotes again. Is what we could see from the broker deal able rates? Absolutely not, hence the requotes. It is the broker's responsibility to have full stream of indicative quotes 24/5 so that opened positions have their P&L quoted and calculated correctly. For a matter of fact, Reuters does have a Dealing 3000 platform, where quotes are also streamed into there from banks.

So what if they don't have quotes from liquidity providers? It's the broker's responsibility to take action against the banks but not make the client take up a mistake which is beyond his physical control.
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