three things i learned as arbitrage and inefficience in stock market here in Brazil was:
1- buy stocks here in Brazil and sell the correlated ADR in USA o vice versa
2- watch foreign contracts in BM&F (futures here), if there is a a huge number of foreign contracts contracts bovespa will go up
3- if you have two shares very correlatated (two banks for example) you buy the cheaper. In the future when the other is cheaper you sell the first and use all this money to buy (i think you try to double you position). So instead of bank profits you only try to increase shares. Your hope is that even if the share goes from R$30,00 to R$10,00 you have tenfold your number of shares. Then one day both will increase value too or at least will have the same value but you have more shares. The risk is one of them broke never came back to correlation before you increase your shares enough to make profits.
so the similar i can see in Forex are:
for 1- buy spot sell CME futures. So simple that i doubt it works.
for 2- COT report. Too much lag.
for 3- i don't remember any strategy about it (increase lots). Here we have swap too. So an idea is increase lot in pairs (maybe two baskets?) that have positive swap (even if not the objective it is necessary).
any ideas?
EDIT: just realized that pip value can be very important trying this here.
1- buy stocks here in Brazil and sell the correlated ADR in USA o vice versa
2- watch foreign contracts in BM&F (futures here), if there is a a huge number of foreign contracts contracts bovespa will go up
3- if you have two shares very correlatated (two banks for example) you buy the cheaper. In the future when the other is cheaper you sell the first and use all this money to buy (i think you try to double you position). So instead of bank profits you only try to increase shares. Your hope is that even if the share goes from R$30,00 to R$10,00 you have tenfold your number of shares. Then one day both will increase value too or at least will have the same value but you have more shares. The risk is one of them broke never came back to correlation before you increase your shares enough to make profits.
so the similar i can see in Forex are:
for 1- buy spot sell CME futures. So simple that i doubt it works.
for 2- COT report. Too much lag.
for 3- i don't remember any strategy about it (increase lots). Here we have swap too. So an idea is increase lot in pairs (maybe two baskets?) that have positive swap (even if not the objective it is necessary).
any ideas?
EDIT: just realized that pip value can be very important trying this here.