Chances are that if you are a trader you rely either on technical information or you are fundamentally focused, but price action forms part of your overall timing. Either way you want reliable information based on the real market. It is no good looking at a green candle when the rest of the market see‟s red all because of a difference in timing with the U.S. or U.K data or accounting provider. Data can also vary based on it being raw, cleaned and/or adjusted (taking into account corporate actions etc) and the cheaper providers may or may not be using the cheapest data so you may not get the full story.
Live test the CFD provider to your needs and confirm the accuracy of their data
Whether the bid, offer or mid-price is used on a chart is not entirely relevant, however you will want to make sure:
- What price basis you have tested on
- How your method works and is relevant to what is displayed
- What you are reading from the charts is aligned with how you will trade live. Maybe you will make trade decisions from a third party dynamic software, but you will want reliable pricing from your live platform so you may want to review the top two or three providers you think match your needs then sign up for all 3 and check the difference for yourself to find the best match.
I can already hear a few people saying ‘that sounds like hard work’. Well maybe it’s more than you are used to, but you will learn over a short period of time to rely on their platform, pricing, stability, credibility and service so let’s try to get it right the first time. If you buy a sub-standard house, car or appliance you are stuck with it for quite a while. With a CFD provider you can test them all for very little upfront costs, taxes, depreciation or hassle so if you can. Do check the top two or three providers with live data if you can. If you are an experienced trader with a larger float and decide to place say $20,000 in a trade, place $10,000 with two providers and see the trade from beginning to end over a few trades and check the result. Once you have decided on a provider it becomes harder to change as you get to know their logins, software, support services, nuances and systems. Invest your time wisely in the beginning, if you can‟t then diversify to several providers.