Market data and simulated execution
Price feeds, spreads, fills, pending orders, stops, margin, lots and pips: how simulated trading works and what traders expect from it.
Where do prop firms get their price data?
Prop firms get prices from their trading platform's feed, a broker or liquidity provider, or a market data vendor. For forex and CFDs the feed usually comes bundled with the platform. Futures firms license data from exchanges. The feed determines the spreads traders see and how realistic their fills are.
What is a live price feed?
A live price feed is a continuous stream of current bid and ask prices for each instrument, updated every time the market quotes a new price (a tick). Trading platforms use it to display prices, fill orders, trigger stops and calculate equity. In a prop firm it also drives the rule engine.
What is the cTrader Open API?
The cTrader Open API is the programming interface Spotware provides for cTrader, letting applications connect to a cTrader account to receive live prices, symbol details and history, and to trade. Third-party platforms can use it as a source of market data under Spotware's terms and the connected broker's.
Do traders in a simulated account see real market prices?
In a well-built simulator, yes: the account shows live bid and ask prices from a real market feed, and orders fill at those prices. What is simulated is the execution and the money, not the prices. Some setups add markups or delays, which makes the experience less realistic.
What is the bid/ask spread, and how does it affect traders?
The bid is the price you can sell at and the ask is the price you can buy at; the spread is the difference. Every trade starts slightly negative by the spread, so wider spreads make every trade more expensive and loss limits closer. Traders compare spreads between firms carefully.
What is slippage in a simulated account?
Slippage is the difference between the price a trader expected and the price they got. In real markets it happens when prices move or liquidity is thin between sending and filling an order. Simulators may model it or may fill at the current quoted price. Firms should state which approach they use.
How are pending orders triggered in a simulated environment?
Pending orders, such as buy limit, sell limit, buy stop and sell stop, wait at a set price and are converted into positions when the market reaches that level. In a simulator, each new price tick is checked against every resting order, and orders whose level is reached are filled at the live price.
How are stop loss and take profit executed in a simulator?
A stop loss closes a position when the price moves against it to a set level; a take profit closes it when the price reaches a target in its favour. A simulator checks each new tick against these levels, using the bid for long positions and the ask for short positions, and closes the position at the live price.
What happens to open positions over the weekend?
Most forex, metals and index markets close on Friday evening and reopen on Sunday evening (UTC). Open positions stay open, and their value does not change while prices are frozen. When markets reopen, prices can gap, which can trigger stops at worse levels and move equity sharply. Crypto usually trades through the weekend.
How is floating profit and loss calculated?
Floating, or unrealised, profit and loss is what an open position would make or lose if closed now. It equals the price difference between entry and the current closing price, multiplied by the position size and contract size, then converted into the account currency. Equity is balance plus floating profit and loss.
What is the difference between equity and balance?
Balance is the account value from closed trades only. Equity is balance plus the floating profit or loss of open positions, so it shows what the account would be worth if everything were closed now. Most prop firm loss limits are measured on equity, because it reflects risk that is already on the table.
What are margin and free margin?
Margin is the amount of account equity set aside to hold open positions, based on their size and the account's leverage. Free margin is equity minus the margin in use: what remains available for new positions. If an order would need more margin than is free, it should be refused.
What is a margin call on a prop account?
A margin call is the warning, and sometimes automatic action, when an account's equity is no longer enough to support its open positions. In prop accounts, margin calls are rare in practice, because loss limits such as the daily and maximum loss breach the account long before margin is exhausted.
What is a lot, and how is lot size calculated?
A lot is a standard unit of trade size. In forex, one standard lot is 100,000 units of the base currency, a mini lot is 10,000 and a micro lot 1,000 (0.01 lots). Other instruments define a lot differently: one lot of gold is usually 100 ounces. Position value depends on the instrument's contract size.
What is a pip, and how is pip value calculated?
A pip is the standard small price increment in forex: 0.0001 for most currency pairs and 0.01 for pairs quoted in Japanese yen. Pip value is how much money one pip is worth for a given position size. For a standard lot on a pair quoted in US dollars, one pip is worth $10.
How do contract sizes differ for gold, indices and crypto?
Contract sizes vary by instrument: one lot of gold is commonly 100 ounces, so a $1 move is worth $100 per lot; index CFDs are often priced per point per contract; and crypto lots are often one coin. Traders must know each size to calculate risk correctly, especially when moving from forex.
How does leverage affect required margin?
Higher leverage lowers the margin needed to open a position: at 1:100, a $100,000 position needs $1,000 of margin; at 1:30 it needs about $3,333. Leverage does not change profit or loss per pip, but it lets traders open larger positions relative to their equity, which increases risk.