Quote flicker: when the price jiggles without trading

[Shadow Trader]

On thinner pairs and during slow hours, the bid and ask can update many times per second without any trades occurring. Price oscillates between two or three values, and the tick count shoots up.

This is quote activity, not trade activity. Liquidity providers constantly refresh their prices as they adjust to the broader market, and the aggregated feed shows the best bid and best offer at each moment. When providers compete, the best price flips between them.

The effect on charts is surprising. A one-second chart shows apparent volatility and "range" that no real trade could capture. A mean-reversion strategy tested on this data can look excellent: price jumps up a tenth of a pip and back, repeatedly. In live trading, the spread eats every swing.

Flicker also tricks some indicators. Momentum oscillators on tick charts show frequent crossings caused entirely by quote noise.

Smoothing the feed, using a minimum price change filter, or relying on mid-price with a minimum interval between samples helps. A good test is whether an apparent edge survives when the spread is subtracted at every simulated trade.

Anyone found a clean way to filter flicker out of tick data before testing?