What to choose - a four-or five-digit quotes?
Four-and five-digit Forex quotes today considered as equivalent. But novice currency trading can be frightened unusual display value of the currency. Which is better - four or five-digit? How to calculate the price of one item? Will adviser to trade in both types of quotes or you can install only one of them? And finally, any broker select considering the quotations differences of 10? Let's deal.
Old and new items
Sometimes you can find the following definition of a different number of decimal places displayed in quotes Forex - old and new items. What does this mean? Old - this four-quotes, and new - five-digit quotes. That's the whole difference. Example four - the quote EUR/USD = 1,2010, five-digit - 1.20105.
What is the difference between old and new items? What are the advantages of each type of quotes? Of course, the five-digit more accurate. But even given the high leverage, which most brokers can reach the ratio of 1:500, one hundred thousandth (!) Almost does not change anything in terms of profit or loss. On the contrary, sometimes the price can not reach it on this one hundred thousandth to take profit - and the position is closed.
When trading through a broker with five-figure it must be considered when placing stop orders. If the trade is made manually, the level of take profit or stop loss just rounded (eg not put TP 1.25135 and 1.25130). Use the best forex ea reviews for issuing stop orders.
On the other hand, the five-used brokers (dealing centers) with trading NonDealingDesk. In other words, transactions are displayed directly on the stock exchange, which is undoubtedly good. The problem is that sometimes, opening trade in active price movements, we will receive from the broker question - price has changed. Enter the new price? After all, we were given a request for the same price, but at this time it is moved (changed), which is especially noticeable in the five-digit. The solution is simple - to cancel the request and enter the current price or wait a little more favorable entry point.
Four-, five-digit quotes and advisers
Well, the old and new points clear. And what advisers? Do I need to change the code of the program to commercial counselor worked equally well on both types of quotes?
Answer - No, most do not need to change anything. New advisers automatically take into account the number of decimal places in the quote when placing stop orders, pending orders, pulling the take profit, etc. Some old advisers (about 1% of all trading robots) need to change the settings in the transition from a four-to five-digit. But today it is very rare.
To verify that the opening, closing and transaction trading robot you just need to put the EA on a demo account for a while. After the close of the first trades can be sure that the adviser sells well on the bill with five digits.
Choosing a Broker
And the last question, what is a broker we decide based on the different display quotations? By and large, the number of digits after the decimal point in the quote does not affect the quality of trade or profit. There are more important trading conditions: spread, swap, speed of order execution, etc.
For example, opening a cent from the famous broker Forex4you, we can choose a regular or a cent (four) or Cent NDD (five-digit). Also be sure to consider swaps - you can open an account where the open positions will not be charged swap. In general, it's good, because in most cases the swap has a negative value, bringing the loss to the trader. Shortage without swap account with the broker - the first day of the new month broker is not charged interest for the funds, which is 7% per annum. Lot or a little - you decide. But if you trade in a way that positions are held day or more - think about trading account without swaps.
So, we discussed that the four-and five-digit quotes quotes have small but insignificant differences. The essence of trade does not change, just the two kinds of quotes to consider when trading advisors and orders manually.
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