Have your ever heard about latency arbitrage? | Forex Factory

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Have your ever heard about latency arbitrage?

  • #1
  • First Post: Oct 17, 2011 9:12am Oct 17, 2011 9:12am
In a few words, you make money due to the difference between price feeds. It a cool way to make money, however, is it available for the regular traders with 20K trading capital?

Regards,

Josef
  • #2
  • Oct 17, 2011 10:26am Oct 17, 2011 10:26am
Countdown to what broke rs hate most:
10.
...
1. latency arbitrage

I read on ff that they stop this early, similar to discouraging scalpers perhaps using a fixed spread.

I have, however, noticed significant differences between, say, fx solutions and instaforex, especially on the holidays.
  • #3
  • Oct 17, 2011 1:39pm Oct 17, 2011 1:39pm
Quoting josef
In a few words, you make money due to the difference between price feeds. It a cool way to make money, however, is it available for the regular traders with 20K trading capital?

Regards,

Josef
Hi,
from what I read about this matter I would say that the level of technological background needed fot latency arbitrage is so high that it is only available to big players. Here is a paper about latency arbitrage that might help you: http://www.themistrading.com/article...er_4__2009.pdf
  • #4
  • Oct 18, 2011 2:32am Oct 18, 2011 2:32am
I'm talking about real latency arbitrage, with the liquidity providers.

InstaForex - I wouldn't recommend to trade with this broker.

Regards,

Josef
  • #5
  • Oct 18, 2011 6:00am Oct 18, 2011 6:00am
Check out this thread. http://www.forexfactory.com/showthread.php?t=167861
There is also a latency table to brokers.
  • #6
  • Jan 6, 2013 1:02am Jan 6, 2013 1:02am
i have very nice and 99% success ratio arbitrage ea making 2000$ every day in demo but i am not able to use it in live market.
bcz of spread different can you suggest me any good broker who can give low spread and allow arbitrage?
  • #7
  • Jan 6, 2013 1:44am Jan 6, 2013 1:44am
Quoting smithforhelp
can you suggest me any good broker who can give low spread and allow arbitrage?
No. That only works in demo. No br0ker is gonna want to give money away like that.
  • #8
  • Apr 12, 2013 12:37pm Apr 12, 2013 12:37pm
Quoting smithforhelp
i have very nice and 99% success ratio arbitrage ea making 2000$ every day in demo but i am not able to use it in live market. bcz of spread different can you suggest me any good broker who can give low spread and allow arbitrage?
are you open to share your EA? i will try to run on my live account that i have with a broker that allows correlation arbitrage and latency arbitrage.
  • #9
  • Apr 12, 2013 2:55pm Apr 12, 2013 2:55pm
Quoting smithforhelp
i have very nice and 99% success ratio arbitrage ea making 2000$ every day in demo but i am not able to use it in live market. bcz of spread different can you suggest me any good broker who can give low spread and allow arbitrage?

Is your EA a latency arbitrage?? or hedge arbitrage??

J.
  • #10
  • Apr 12, 2013 3:12pm Apr 12, 2013 3:12pm
Latency trading was very real in MT4 about a year ago; if you compared a demo-pro feed (which used co-location servers) against your live account (which goes through their manager software), then you saw 100 pipette difference very often that gave you a 30 second heads-up of where price was heading.

Jason Fielder then released some latency arb software for $2k+ and they fixed the MT4 feed discrepancy and ever since there has been a 100% match on candles from different brokers on MT4.

But banks do indeed use latency arbitrage and pay big fees to put their co-located servers running black-box algos next to the exchange, so they can know price before anyone else. Just wait until quantum computing and FTL becomes viable, then the market will be ruled by SkyNet.
Politics is the womb in which war develops.
  • #11
  • Apr 12, 2013 3:14pm Apr 12, 2013 3:14pm
Quoting Ziusz
i have with a broker that allows correlation arbitrage and latency arbitrage.
That is not true, any broker will withhold any monies if they suspect any shenanigans.
Politics is the womb in which war develops.
  • #12
  • Apr 12, 2013 4:35pm Apr 12, 2013 4:35pm
Quoting FiatFap
Latency trading was very real in MT4 about a year ago; if you compared a demo-pro feed (which used co-location servers) against your live account (which goes through their manager software), then you saw 100 pipette difference very often that gave you a 30 second heads-up of where price was heading. Jason Fielder then released some latency arb software for $2k+ and they fixed the MT4 feed discrepancy and ever since there has been a 100% match on candles from different brokers on MT4....
Latency arbitrage for mt4 has been around a long time. 7-10 years at least
Making the marketer scam-er Jason Fielder to sound like He mas the reason for "fix" by metaquotes is funny.
He probably paid $500 to someone to copy one of the dozen codes already available from the past. I was doing latency
5 years before he came out with his wanabe software.

"matching Candles"??? ..what that has to do with arbitrage??? Arbitrage is a tick thing... many arbitrage can happen in 1 candle.

Banks don't do latency arbitrage. They scan hundreds of quotes (no such thing as "the" price) and Market make... Meaning
they buy anything they see with a low ask and resale it.

Next to what exchange?? Spot forex is not transacted in any exchange.

Most of Brokers that have fast server and are STP can care less if you try to arbitrage them... why?? Because their pricing
is totally in pace with the market. Most of the low budget Brokers (tech) or white labels are always behind and also trying to market
make... so, they would never fill orders when the price already move higher. That means they would need to pay a high price
and sell it to you cheaper.. no business like to do that.

J.
  • #13
  • Apr 12, 2013 4:45pm Apr 12, 2013 4:45pm
Quoting jeuro
Latency arbitrage for mt4 has been around a long time. 7-10 years at least Making the marketer scam-er Jason Fielder to sound like He mas the reason for "fix" by metaquotes is funny. He probably paid $500 to someone to copy one of the dozen codes already available from the past. I was doing latency 5 years before he came out with his wanabe software. "matching Candles"??? ..what that has to do with arbitrage??? Arbitrage is a tick thing... many arbitrage can happen in 1 candle. Banks don't do latency arbitrage. They scan hundreds of quotes...
I sincerely appreciate your eloquent correction of my misinterpretation, thanks jeuro

All i know is what i saw with my own eyes about a year ago where the candles painted differently on 1 min TF using two MT4's, each with different servers (demo-pro versus a live classic account) and once Fielder released his arb software, the candles have since been the same.
Politics is the womb in which war develops.
  • #14
  • Dec 27, 2013 3:23pm Dec 27, 2013 3:23pm
Guys, price discrepancies between brokers still exist. They are called arbitrage opportunities.
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  • #15
  • Dec 28, 2013 12:22pm Dec 28, 2013 12:22pm
Quoting Spox
Guys, price discrepancies between brokers still exist. They are called arbitrage opportunities. {image}
Cool. Just realize that you have to move huge amounts fast which might be too much in context of the available liquidity at those brokers.

There is nothing new about the discrepancies. There is no central price for anything. Open Bloomberg or Reuters terminals and you will find discrepancy in prices fed by different banks. It may widen, it may narrow.

The same chocolate bar may cost 30 cents more or less at a store just around the corner. The difference might be even greater at some wholesale warehouse or ex-factory. Have you ever considered chocolate bar arbitrage? The percentage differences per dollar are really huge compared to FX markets.
  • #16
  • Dec 29, 2013 5:36am Dec 29, 2013 5:36am
Quoting grin
{quote} Cool. Just realize that you have to move huge amounts fast...
There is no need to move huge amounts and fast at all. Just from time to time transfer part of income to unprofitable accounts (if any) to keep all accounts balanced. To be successful in arbitrage, arbitrageur needs to be humble and not greedy. Generally speaking you don't want to be seen by brokers as arbitrageur. How many pips do you need per day to be satisfied? Is 10 pips good enough if you have them consistently? You can earn even more(as you stated: There is nothing new about the discrepancies) but it is better to stay consistent earning less than earning big amounts for short period of time. Many people will still be quite happy earning amounts below six zeroes Of course it is only my humble opinion and it doesn't necessarily means this style of trading fits your needs. Please give me details about chocolate bars price feed. I will consider them for arbitrage if FX market will somehow be centralized some day.
  • #17
  • Feb 24, 2015 10:49pm Feb 24, 2015 10:49pm
...after over a year:

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You can also watch them live aonet.eu/AOFeed
  • #18
  • Jan 19, 2017 4:31pm Jan 19, 2017 4:31pm
Have your ever heard about Locking latency arbitrage? I think it is the best one for now.
  • #19
  • Feb 6, 2017 12:50am Feb 6, 2017 12:50am
Quoting fteller
Have your ever heard about Locking latency arbitrage? I think it is the best one for now.
i know that westernpips ea have hidden and Locking arbitrage algo
Forex is my life!
  • #20
  • Feb 6, 2017 6:22am Feb 6, 2017 6:22am
Quoting josef
In a few words, you make money due to the difference between price feeds. It a cool way to make money, however, is it available for the regular traders with 20K trading capital? Regards, Josef
I haven't really heard much about this, but I saw somewhere that it is more like an automated trading and you kinda deal with two types of brokers or something..?
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