Software for arbitrage trading or EA (EA)
Latency arbitrage is a program, which implements a trading algorithm based on the fact that the rate of quotes submission to some forex brokers (fast forex brokers) is much faster than to the majority of brokers (slow forex brokers). This makes it possible to implement comparison of quotes of fast and slow forex brokers and if there are advances in the price movement at a fast forex broker it is possible to open an order at a slow broker. Originally such algorithms were implemented as expert advisors or forex robots in programming languages offered by different trading platforms. Now, the modern implementation of latency arbitrage is a full-fledged program with a lot of tweaks and features, for this reason, the number of quality software products for arbitrage trading in the forex market is very limited.
How to choose the right forex arbitrage robot
There are several companies on the net that have proven themselves in programming forex arbitrage trading robots. These are BJF Trading Group, WesternPips (WP), and HFT Arbitrage Platform.
A trader, before buying arbitrage software for forex trading, must have a clear understanding of the difference between the various algorithms for arbitrage trading (different arbitrage strategies) and which algorithm is best suited to his goal.
So, all arbitrage trading products can be divided into
A) Standard Latency Arbitrage. Standard latency arbitrage is rarely used on Forex, because brokers have learned how to easily identify accounts, on which the trade happens with the help of software for standard latency arbitrage: latency arbitrage ea, latency arbitrage robots, etc. But it remains well applicable for cryptocurrency trading – latency arbitrage bot.
B) Hidden latency arbitrage. Hidden latency arbitrage: Lock arbitrage, 2-legs arbitrage uses two or even sometimes 3 accounts. This allows you not to close orders and hashed or, more correctly, lock them for a long time, thereby masking the short-term arbitrage trade. In my opinion, such advanced strategies as 2-legs latency 1, 2-legs latency 2, and especially 2-legs latency 3 from hftarbitrageplatform.com and their analogs from bjftradinggroup.com most effective for trading in the forex market for deposits from a few hundred dollars to hundreds of thousands.
C) Hedge Arbitrage is a method of trading in which quotations are compared between two or more brokers and a hedge position is opened to fix profits in case there is a difference in quotations. Closing of a hedge position may occur either on price alignment or after the achievement of a certain time or in case of occurrence of an opposite arbitrage situation. Such strategies are applicable in the Forex market for deposits from 20,000 as the greatest effect can be achieved by using FIX API accounts and trading Limit FOK / IOC orders to control slippage. Hedge arbitrage is also good for trading cryptocurrencies.
Which brokers are suitable for forex arbitrage trading
Choosing a broker suitable for arbitrage trading is one of the most difficult tasks for an arbitrage trader. You can’t discuss with a broker the fact that you are going to use an arbitrage robot and you can’t try to negotiate with a broker. I would recommend making tests on all of the accounts that you already have open and also using the recommendations of the company that sold you the arbitrage program. I’ll describe below how to open an account and I recommend following this algorithm and not compromising in any way, for example testing an account with standard latency arbitrage instead of 2-legged.
Which trading platforms are more suitable for forex arbitrage
If you found a broker to arbitrage then chances are high that this broker will work well on any forex trading platform that it offers. Although this is not a 100% rule. But it says that the main thing is to find a broker and choose a platform from what trading conditions the broker offers for each platform. For example, if the broker offers FIX API, most likely there will be a limit on the minimum deposit.
How to open an account at a Forex broker for arbitrage trading
The most appropriate algorithm for account opening
- Opening 2 accounts for 2 different people from 2 different IP addresses. This can be your and your friend’s IP address. After the opening of the first account, you need to pause for a few days so that the accounts were not consecutive.
- Recharging accounts must be about the same amount, but not the same 100% for example on 530 and 580 dollars.
- Do not check the balances of both accounts from the same IP addresses as the opening.
- Start hand trading with small lots by opening and closing orders, and you can bring both accounts into a slight deficit.
- Start trading with an arbitrage program such as HFT Arbitrage Platform 2-legs latency 2 and use bjf trading group IP Changer.
What are an VPS and which VPS are better for arbitrage trading?
VPS is a virtual server that is installed operating system, in our case we need a server with the operating system windows, as well as programs for arbitrage trading. Firstly the VPS should be in the same data center and your broker hosts the servers it helps to avoid extra delays. The most suitable providers for arbitrage trading
- UltraFXVPS.com – I would recommend it for brokers with servers in London and New York.
- https://beeksgroup.com/ – I would recommend brokers with servers in Tokyo and crypto arbitrage.
You can connect to your VPS from either a windows computer or a Mac.
I recommend checking how the program works at least once a day and spending 10 minutes checking it. Some of the producers of arbitrage programs allow you to send a warning with the arbitrage program to Telegram or e-mail, which allows you to monitor the 24/5
Profits and risks of arbitrage trading
Arbitrage trading is the most profitable trading on the Forex market, but you should note that you should not expect to make a 1000% daily profit. You should aim at 40-50% a month, which is a real goal. In this case, the risks are minimal and are mainly caused by the failure of products or actions of forex brokers. For this reason, you need to control the slippage of orders and at its sharp increase stop working and change accounts.