How Pricing Works in the Forex Market.

Let’s look at how pricing works in the forex market.

In an exchange-based market, there is a “single market” that allows everyone to interact at the same prices.

In contrast, the FX market does not operate in a centralized public exchange. There is no “single market” which means there is no single “market price”.

There is no equivalent of a data feed like SIP that merges all the trades that occur and the best bid/ask prices that are quoted.

This means that the forex market does NOT have the equivalent of an NBBO for each currency pair that would provide an unambiguous “reference” price that every forex broker would have to adhere to. 

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