I'm wondering if anyone out there can shed some light on, or share their experiences with using indicative vs real forex quote data when back-testing trading systems. I've been trying to gain some understanding on the different types of data and how they're collected and came to the following conclusions - if I'm completely wrong with the following, please feel free to let me know! From my understanding, all retails brokers are in fact, mini-marketmakers between their own clients and clearing banks, only clearing trades with their clearing banks when absolutely necessary. This would basically mean that each Forex brokerâs quotes (while "pretty much" following the market) are their own, and therefore different from another brokerâs quotes, depending on what their clients are up to. I've verified this by downloading several demo platforms from different FOREX brokers and comparing their quotes. For instance, comparing Saxobankâs and FXDDâs hourly quotes shows normal quote differences of around 5-10 pips but can vary by as much as 50 pips! Even the guys who claim to not have Dealing Desks, still seem to make their own internal markets but often through an associated or sister company (so they can claim to not have a Dealing Desk). My conclusion then to all this is that if you wanted to use ârealâ market data, rather than indicative data, you would have to get that data from the broker you happen to be using at that time, as he is the one who is âmaking your marketâ at that time. Personally, I would find it a bit risky to only use data from only one specific broker as, should he decide to change the matching conditions etc for whatever reason (for instance, a lot of brokers seem to be doing this now in response to all the news traders by widening spreads etc around news times), that âedgeâ that I thought I had could quite quickly disappear! With all this in mind, Iâm actually very interested to know what other automated forex trading system developers out there are using with regards to back-testing data. Up until now, I've developed my systems using indicative data ('cause it's cheap!) and then once a "profitable" system has been developed, test it using quote data from several different broker's. If it still works, then I may consider trying the system live, otherwise, it's back to the drawing board. SOoooooo.. what are you guys doing?