eSignal - All about Forex

eSignal - All about FOREX

What is Forex Trading? 
Simply defined, foreign exchange (Forex) trading is exchanging one country’s currency for another’s. It comprises four variables: currencies, exchange rates, time and interest rate. The way these components interrelate provides small investors with a return on their investment that they don’t generally find in the more traditional trading venues. For an overview on Forex and why it's popularity is increasing, please visit our Forex Marketing Information page .

How much does it cost to subscribe to Forex?
Are there any sample pages/layouts available?  
How do I enter a Forex symbol?
How do I reverse Forex Cross Rates?
I see subscription rates for Forex ranging quite a bit. Aren't all Forex quotes the same?  
What does Forex volume represent?  
What hours do Forex issues trade?  
Since Forex quotes are Bids and Asks, what is used for the Open, High, Low, and Close?
How many decimals places do you quote for Forex? 
Does eSignal Support fractional Pips?  
I'm showing "No Data" when I typed in a cross-rate.  How come?  
What are the benefits of the Forex Market Depth service?  
Why are Forex daily charts sometimes different than interval charts?
Why do Forex Forward Rates sometimes show as negative?

How much does it cost to subscribe to Forex?  
Check the following links for information on Forex add-on fees. You can add Forex to all subscription plans. 
Realtime Forex Rates (select the "Fixed Income and Forex" tab)
Forex Delayed Rates  (Please note that the Delayed Forex service includes access to the Composite symbols only.  Single Contributor symbols (i.e. EUR@FXDD A0-FX) are not offered with the Delayed Forex bundle)

Are there any sample pages/layouts available?  
Yes, we've put together 4 samples that Forex traders may find useful. We've also posted a sample picture of each so you can see the sample before downloading it. The sample files are loaded on the eSignal File Share site. There is also a sample quote window of the single contributor symbols available here.

How do I enter a Forex symbol?  
To get the cross-rate for a currency against the US Dollar, you'll need the 3 letter currency code, the spot or forward rate code and then add a hyphen and the Forex designator, or "-FX". For example, the Japanese Yen spot rate would be JPY A0-FX (there's a space between JPY and A0 and that's the number 0 and not a letter.) To get the cross-rate for a currency against another currency other than the US Dollar, then you'll use two currency codes followed by the spot or forward rate code, and "-FX" (e.g. EURJPY A0-FX)

For further information, please see our Forex Symbol Guides.
Symbols Guide - Forex (Currency Codes)
Symbols Guide - Forex (Format & Contributors)

Please click here for an update regarding the 5th digit resolution on the British Pound (GBP).

How do I reverse Forex Cross Rates?
Except where noted in our Forex Symbols Guides, all rates that have one currency code are based on the US Dollar, so GBP A0-FX represents how much currency in USD can you get for one British Pound. To get a reverse cross rate (i.e. relative to a currency other than USD), you can use a mathematical formula to represent a reverse cross rate in the following manner:

1 / Currency Code(s),,Spot/Forward Code,Exchange code
Example: 1 / GBP A0-FX, 1 / EURJPY A0-FX

 

I see subscription rates for Forex ranging quite a bit. Aren't all Forex quotes the same?  
Not really. eSignal's Forex data is from GTIS -- an affiliate of Interactive Data and the primary supplier, for more than 20 years, of foreign exchange information used by traders, corporations and financial institutions. You'll get the following when you subscribe to Forex:

• Spot rates for more than 100 currencies, as well as precious metals
• Cross rates
• Forward rates
• Nearly 200 global bank and broker contributions (Asia / Pacific Rim, Russia, Europe and North America) (Check out the complete listing.)
• Additional contributors: Garban Intercapital, the world's leading derivatives, securities and money broking business
• Quotes and charts from either individual contributors or a combined composite that contains all current contributors.
• Forex Market Depth with the ability to view the best bid / ask by Forex contributor
• Streaming, real-time quotes, charts and news for the information you need to trade Forex successfully

In addition to the above features, it's important to compare the number of currencies we cover and the number of contributors providing quotes through our system. Many Forex services provide quotes from a single source or just a handful of providers. With GTIS, communication lines are set-up between the GTIS network and each contributor. Programming is then put in place to manage the data and the quality of each connection. As a result, supporting 200+ contributors is far more costly than supporting say 1, 5, 10, or even 100.

To illustrate the importance of this network of contributors, we compared the GTIS feed with two other well-known Forex providers. Below are the results:

Forex Provider Comparison AUD/USD (eSignal symbol AUD A0-FX) 
Testing began 00:00 December 4th to 19:00 December 5, 2003 (all times EST)
A total of 2,580 minutes

DATE		First Update
		Source A	Source B	GTIS
December 4	First update Last update Total # of updates	00:00:40 23:56:10 535	2:10:56 19:02:18 376	0:00:02 23:59:52 14,530
December 5	First update Last update Total # of updates	00:06:08 17:57:35 455	2:14:40 16:00:17 311	0:00:00 19:01:04 9,958
Totals		990	687	24,488

As you can see in the above table, the number of updates in the GTIS system dramatically outdistances the number of updates from either of the two other sources. This is a direct result of the number of contributors within the GTIS network.

GTIS: Average of 9.5 updates per minute, or 38 updates every 4 minutes
Source A: Average of 0.38 updates per minute or fewer than 2 updates every 4 minutes
Source B: Average of 0.27 updates per minute or about 1 update every 4 minutes

While the above test is just one snapshot in time and that it's likely results will vary, we do believe these outcomes would be generally consistent and do reflect the differences between selected Forex providers. 

What does Forex volume represent?  
The volume histogram for Forex issues represents the number of transactions or ticks and not true "trade size" activity. It's much like most pit-traded futures contracts, where the volume histogram reflects the volume of transactions or updates during each given interval. This is also why you'll see a volume histogram on an intraday chart but not on daily, weekly, and monthly. 

What hours do Forex issues trade?  

Forex data is traded 24 hours per day and there is no official Open and Close time. We have chosen our Open and Close time to coincide with when our Contributing Banks reset their servers.

 

The Open time on Sundays is approximately 17:00 GMT (9:00 PST, 10:00 PDT). The Close time that is used is 21:50 GMT (13:50 PST and 14:50 PDT).  The Settlement price takes place at 22:00 GMT (14:00 PST and 15:00 PDT).

 

Therefore, you should see real-time updates on Forex symbols from approximately 17:00 GMT each Sunday (opening times will vary based upon activity) until approximately 22:00 GMT each Friday.  

For Daily Charts, you can choose to display either the close or settlement price (right click the chart and select Properties to toggle the setting on or off: use settlement for daily charts). 

The closing prices captured at 21:50 GMT (13:50 PST and 14:50 PDT) are saved independently by each of the history servers which could lead to slight sub second variations from server to server.  Using the settlement price for Forex daily charts brings a consistent closing price across all the history servers.

Please note the Weekly chart uses the close time so you'll want to uncheck this setting for the Daily chart to match.                                                            

Since Forex quotes are Bids and Asks, what is used for Open, High, Low, and Close?   

Daily Chart, Quote/Detail Window:

Open -> First Bid of the day

 

High-> Highest Bid of the day

 

Low-> Lowest Ask of the day

 

Close-> Last Bid of the day

 

 

Intraday Chart:

Open -> First Bid of the timeframe

 

High-> Highest Bid of the timeframe

 

Low-> Lowest Bid of the timeframe

 

Close-> Last Bid of the timeframe

 

how many decimal places do you quote for forex?
most contributors/brokers now report in 5 decimal places (i.e. the euro: 1.41475). some continue to report in just 4 digits of resolution so you'll see 1.4147, mostly on the single-contributor symbols. we are now showing most composite symbols with 5 digits (includes 1/10the pip resolution) with the key exception of britsh pound (gbp), which remains at 4 digits of resolution for the composite. if your broker still only supports 4 digits, you can view that format by using the broker-specific symbol.

does esignal support fractional pips?
yes. for most currencies, the composite symbol will show 5 digits of resolution, with the exception being british pound (gbp), where we still show the composite symbol with just 4 digits (full pip's) but you can see 10th's of a pip by using the broker-specific symbol on gbp. 

i'm showing "no data" when i typed in a cross-rate. how come?
there could be a number of factors as to why you may not be seeing data on a specific forex cross-rate.

        1. check the symbology - quite often the zero in the spot rate code (i.e. a0) is confused for a "o"
        2. inactivity - make sure the currency pair you are looking at is quoted actively. for example, if you try to look up the cross-rate between the bangladesh taka and south africa rand , you will likely not find any forex contributors quoting that pair.
        3. contributor not quoting - if you are using a single contributor symbol (i.e. zar@fxdd a0-fx), and you are not receiving any data, make sure that contributor is actually quoting that symbol. in the above case, the bank fxdd does not make deals with the usd/zar currency pair.

what are the benefits of the forex market depth service?  
as opposed to seeing just the current bid/ask quote, the market depth window allows you to quickly view all the most recent quotes and gain a better perspective of where the market may be moving.

unlike most equity exchanges, gtis (forex data provider) does not provide a best bid or ask of any sort. they just send out what they get from the contributing banks when they get it, regadless of price. if you have a forex symbol in a market depth window, you are applying a sorting function to the data. the quote area at the top of the depth window (level 1 area) will not match top of the book (level 2 area) like an equity. the level 1 area will show the current bid and ask price. so the level 2 area sorts the bid and ask prices for the symbol from highest to lowest price. the level 1 area will show the most recent bid and ask prices. there is no best bid or ask data.

forex depth for esignal 11:
once subscribed to forex depth, click new, market depth to open the depth window.  enter a forex symbol at the top of the window:



forex depth for esignal 10.6:
once subscribed to forex depth, click file, new, market depth.  enter the symbol then select the regional tab at the bottom to view this data. 



why are daily charts sometimes different than interval charts?

When comparing interval and daily FOREX data, sometimes there can be differences between the highs and lows. The cause of this is due to FOREX being traded 24 hours a day, time differences around the world, and the cut off point of where one day ends and the next begins.

 

If we take residents in the UK as an example – you may (wrongly) assume that the data used to form a daily bar is taken from 00:00-23:59 GMT. However, the daily data in fact consists of the data from 22:00 – 21.59 GMT. Why? Because we take the end of the trading day of FOREX to be at 22:00 GMT (14:00 PST or 15:00 PDT).

 

 

With the above taken into consideration, if a new High were to occur at 22:15 GMT it would appear on the daily chart in the next day’s bar. Looking at an interval chart, the High would still appear at 22:15 of the current day.

 

 

Real-time updates on Forex symbols will show from approximately 17:00 GMT each Sunday (opening times will vary based upon activity) until approximately 22:00 GMT each Friday. However, for the purpose of creating daily bars all data from Sunday is incorporated into Mondays daily bar. 

Why do Forex Forward Rates sometimes show as negative?   
If the forward contract bid price is less than it's ask price, then these are added to the bid/ask spot price to get the outright value of the forward.  If the bid price is greater than the ask price, these are subtracted from the bid/ask spot price, causing the forwards to be negative.

For example:  EUR spot bid/ask = 1.1435 and EUR 1y bid/ask = 110-105

The 1y forward values have bid prices greater than ask prices, so they have to be subtracted from the spot price to get the outright forward values (1.1320 - 1.1330).

When both the bid and ask forwards are added, there is no need to send a sign, + or -.  Similarly, when both are to be subtracted, there is no need to send a sign.  The bid being greater than the ask is the clue to subtract, which is why we don't send the "-" signs.  However, when the bid is to be subtracted and the ask is to be added, then it is necessary to send the -ve sign for the bid.

The "last" numbers that are to be subtracted should be stored as negative, otherwise you would not be able to tell whether they should be added or subtracted from the spot.  The bid and ask prices should also be stored with the -ve sign when they are subtracted, otherwise you end up with meaningless charts each time a genuine -ve is sent.  The best example would be EUR 5Y-FX

The Forex Forwards also reflect the relative interest rates between 2 countries.  The interest rate in Japan is lower than in the USA, so all the forward tenors are subtracted for JPY.  The interest rate in Canada is higher than the USA, so all the forward tenors are added for CAD.  The interest rate in Europe is similar to the interest rate in the USA, and the forward FX markets are guessing which way they will move, which is why some of the rates are +ve and some are -ve.