223 Build – Tests and Bid Ask

[quant...@gmail.com]

It has just recently come to my attention that the nature of the Bid
Ask price data has made a significant change. There have been numerous
rumors about the test data being “smoothed” by some brokers. It has
become apparent at this point that this may not be the choice of the
broker but the nature of the dispersion of the price data. In addition
this dispersion may have changed in the live trading data as well.
This change is going to have a DRASTIC IMPACT ON ALL SCALPING PROGRAMS
or any program that uses Bid and Ask prices for order triggers or
spread detection.

The FAP people have been touting the idea that many brokers are
narrowing their spreads. This will be helpful for their program
because it uses both spread detection and the Bid and Ask prices to
make trades. I have just discovered that one of the reasons their Bid
Ask spread detection failed is because the Bid and Ask prices have
become – separated.

Logically speaking the spread detection is expressed as the simple
formula of the Ask – Bid. This expression can only hold true if you
have both an Ask and a Bid price in the same moment of time. It
appears now that the Bid and the Ask price data expires as soon as it
is registered. In other words one data bit is the Ask and the next
data bit is the Bid but you can’t have both a Bid and an Ask in the
same bit. So when the Bid is a value the Ask is a zero value and so
forth.

This should be just fine for order placement as long as you cover the
“spread”. I have had a couple of notifications of 131 errors which are
order placement errors. These errors usually happen when the
parameters of the Order Send or Order Modify are too close to the
current price. With the FAP this should be a major problem when they
use Order Modify to set a 6 Take Profit while the price is moving in
the direction of the Take Profit in a currency with a 5 to 15 pip
spread. How this program worked on the GBPCHF with a 15 pip spread is
really kind of amazing.