Forex arbitrage is a forex trading strategy, which lets traders exploit the price differences between two brokers in order to make profit. Let us give you an example:
Broker A is quoting EURUSD at 1.3000/1.3002, and at the same time Broker B gives you the following quotes for the same currency pair: 1.3004/1.3006. If you buy at Broker A, and simultaneously sell at Broker B, you will profit 2 pips just from the difference in the quotes.
These differences, or inefficiencies, happen most often because of the decentralized market and internet delays caused by poor communication and equipment.
The thing you should keep in mind when practicing arbitrage is that you should be able to react very, very quickly – a small lag in your internet connection, for example, may prevent you from opening a long and a short position with two separate brokers before the quotes align. In other words, in order to practice forex arbitrage, you need two things: quotes inefficiencies (e.g. differences in prices between brokers), and the ability to act super-fast on the opportunity. The window of opportunity is often so small, that it is impossible to place manual trades, therefore many traders revert to special scripts and/or Expert Advisors (EAs) for arbitrage.
Here we are offering you one such Metatrader 4 (MT4) EA in two parts: SA_Server.mq4 (a server advisor) and SA_EA.mq4 (the actual trading bot). The first file should be applied to a broker with fast quotes, and the second one – to a broker with lagging quotes and good execution. The EA monitors the quotes of both brokers and opens a position when it spots an opportunity, e.g. a beneficial difference in the quotes of the two brokers.
Below is our auto-updating log of forex arbitrage opportunities. Keep in mind that this log is not connected to the Expert Advisor offered above, and is of strictly informative value. You should know that we are merely aggregating the data, and cannot influence the price inefficiencies in any way.