What is Arbitrage EA?

Arbitrage EA is a forex expert advisor (EA) that utilizes a high frequency, low latency trading strategy to take advantage of small price discrepancies between brokers and liquidity providers in order to make risk-free profits.

Arbitrage EA

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It acts rapidly when it detects market price differences of just a few milliseconds between brokers. This allows it to enter and exit trades with minimal risk.

How Does it Work?

The Arbitrage EA uses a technique called latency arbitrage which exploits inefficiencies when there is a lag in data feed between a trader’s broker and liquidity providers.

It relies on ultra fast trade execution and needs a faster data feed agent as well as a slower broker where data feed lags occur. When there is a lag, the expert advisor’s trading algorithm starts trading rapidly to obtain maximum profits.

So it requires specific trading conditions including a fast connection speed and rapid trade execution broker. ECN brokers that provide direct access to interbank liquidity are best suited for this expert advisor.

Features and Settings

Some key features and settings of Arbitrage EA include:

Arbitrage EA Pros and Cons

Pros:

  • Profitable if trading conditions are met
  • Risk-free profits in theory
  • Works 24/7 with minimal supervision

Cons:

  • Needs specific trading environment
  • High chance of trade rejection by brokers
  • Requires high capital and leverage

Arbitrage EA Conclusion

The Arbitrage EA offers the possibility of risk-free profits if the right trading infrastructure is available. However it has some significant limitations for retail traders. The ultra fast trade execution makes it challenging to implement for most individual traders. But with enough capital and technology, it can be a viable automated trading strategy.

Author: Dominic Walsh
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I am a highly regarded trader, author & coach with over 16 years of experience trading financial markets. Today I am recognized by many as a forex strategy developer. After starting blogging in 2014, I became one of the world's most widely followed forex trading coaches, with a monthly readership of more than 40,000 traders! Make sure to follow me on social media: Instagram | Facebook | Linkedin | Youtube| Twitter | Pinterest | Medium | Quora | Reddit | Telegram Channel

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