My idea for broker arbitrage - MT4/MT5 resources
We all know that broker feeds are out of sync. Comparing two ECNs or brokers' feeds, you will always see different prices (by a few pips).
The idea is
1) After paying overnight interest, open long and short currency pairs with 2 or more brokers (long/short combinations are always negative, so you need to avoid this)
2) When the difference is greater than the spread, close one of the short or long positions (if the abnormal price is higher, close the abnormal long position, otherwise close the abnormal short position), then close all the other 3 positions when the price equalizes again
You need to go long and short because you don't know if the price difference will be higher or lower than the current price, and you want your float to be 0 before that happens. IE) If the price goes against the position, only going long or short will create negative equity.
EAs that get real-time prices from multiple ECN and MT4 platforms are the best choice. Orders need to be executed at the quoted price to make a profit.
EDIT) This does not guarantee a profit as the price may move against you before equilibrium, thus negatively affecting the equilibrium. I hadn't thought of that until now. Any ideas?
The idea is
1) After paying overnight interest, open long and short currency pairs with 2 or more brokers (long/short combinations are always negative, so you need to avoid this)
2) When the difference is greater than the spread, close one of the short or long positions (if the abnormal price is higher, close the abnormal long position, otherwise close the abnormal short position), then close all the other 3 positions when the price equalizes again
You need to go long and short because you don't know if the price difference will be higher or lower than the current price, and you want your float to be 0 before that happens. IE) If the price goes against the position, only going long or short will create negative equity.
EAs that get real-time prices from multiple ECN and MT4 platforms are the best choice. Orders need to be executed at the quoted price to make a profit.
EDIT) This does not guarantee a profit as the price may move against you before equilibrium, thus negatively affecting the equilibrium. I hadn't thought of that until now. Any ideas?
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