Several types of arbitrage strategies that can be used in the forex market
The foreign exchange market is the most speculative market of all. Here in a day, we can see 100 and 200 points of pronounced movement, which on other platforms can be observed only in the days of the strongest landslides. That’s why, you need to work on the fix api forex market just as speculatively. Thus, use trading strategies that adapt to the current situation and are able to record a stable profit on such movements. To such most popular speculative algorithms, we can safely refer the arbitration approach.
Fix api arbitration – a variety of algorithmic trading systems, the logic of which is not to analyze directly the historical movement of quotations, but the exchange differences between the value of one total financial asset, but on different exchange platforms.
There are three types of arbitrage trading in the fix api forex market, which I am about to discuss today:
- Fix api Latency Arbitrage
- Fix api 2-leg Arbitrage
- Triangle Arbitrage
This type of arbitrage trading strategies involves opening of trading operations on one account, while for analysis two platforms are used in the form of fix api forex brokerage companies. Thus, one platform is analyzed and the quotes are compared with the second one. If there is an exchange rate delay, it is necessary to open speculative transactions towards a more rapid price. To do this, the trader must know in advance which broker is delivering quotes more quickly, and which is slower.
When working with this algorithm, you also need to analyze two trading platforms, but you do not need to determine where the quotes are delivered slowly, but where more quickly. The essence of the algorithm is the simultaneous opening of trading positions. Thus, when there is a course difference between the cost of the same asset by a specified number of items, you must perform a pair operation in the direction of narrowing. So on one platform, where the quotes at the time of the discrepancy are below, the transaction for the purchase is opened, and on the second, where the quotes are above, the sale is opened. This approach allows you to receive guaranteed multiple profit points, without any risk at all.
The third kind of fix api arbitration technique consists in even more complex algorithm. As a rule, such an approach is carried out by banking institutions and it is difficult for us, ordinary traders, to realize it, except if using a prime broker, as well as special software. Triangular arbitration involves the execution of trading operations on the basis of different values between three different cross-quotations and the execution of a consistent chain of speculative operations to obtain a stable profit. The essence is that the program analyzes three assets and when it sees a discrepancy between the applications of other players, it acts as a counter agent in two different transactions. This situation occurs on the market quite often, when large orders are delivered to the foreign exchange market and the price can differ by just a few pips. But given the colossal volumes, an excellent profitability is formed.
These three types of arbitration fix api trading allow the exchange speculators to expand their opportunities in the foreign exchange market due to the simplicity and reliability of the systems (http://forexzzz.com/r/ ). Using this or that method, you can increase your chances of getting more stable and reliable earnings in the financial market. As you could already understand, arbitrage is implemented with algorithmic methods that allow to stabilize and automate this process. To do this, you need to use a server of different brokerage companies, which means the standard software for fix api MT4 will not work. I recommend you to use separate arbitration programs to obtain a high rate of return with minimal risks.