What is the arbitrage trading Forex?

Arbitrage trading in Forex is a strategy that traders use to take advantage of discrepancies in exchange rates across different markets or Forex brokers. The principle behind this strategy is the law of one price, which states that identical goods should cost the same in different markets. Forex arbitrage requires large capital, high-speed trading systems, and complex algorithms to identify and capitalize on these price differences quickly. That’s because these discrepancies tend to be very small and disappear quickly as the market naturally corrects them.

Note that while Forex arbitrage can theoretically be a risk-free trading strategy, in reality, it comes with several risks, including execution risk, liquidity risk, and counterparty risk. Also, arbitrage opportunities are often exploited by high-frequency traders, making it harder for regular traders to profit from them. Lean more about arbitrage trading Forex