I'm going to guess that's a demo account.
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Profiting from different broker prices? 4 replies
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Profiting from interest rate differentials. 15 replies
DislikedI am moving to a non MT4 broker that warned me to not do this. Apparently the inside community is tighter knit than we think. they claim to be able to track you down if you are doing it. Maybe by IP address or something? Not exactly sure how.
Is this considered arbitrage of some sort?Ignored
DislikedAnd also: why would anybody choose such a broker? That's like telling a poker player to not play any strong hands. My definition of trading is arbitraging – everything else is either investing or simply getting ripped off. Arbitrage, like the strategies from this thread, provides exactly the market pressure that keeps an unregulated market working efficiently. And it works better (or at least as well as) any centralized exchange ever could.
Sorry if this sounds like ranting. There are also some fundamental problems that many traditional brokers have to stop their customers from exploiting; usually resulting from promises that simply can't be kept: like fixed spread, guaranteed stops, continuous price, etc.Ignored
DislikedForgetting actual arbitrage for a second...let's presume my broker quotes 1.9950 for the GBP and I KNOW the price is actually 1.9900.
My question is: Is it legal/fair to sell x amount short at 1.9950 knowing that my broker will be forced to correct the price, making me a huge profit?
I would like people's opinion on this. I actually do this regularly and I suppose it is unfair because I am profiting from anothers mistake but even putting fairness aside, is it legal?
Again, in my experience, I would argue it is. The reason for this is because I have done it so many times and made significant amounts of money doing it that if it wasn't legal then I am sure the company would be quick to tell me that they would not pay out/honour my bet. This has never happened however.
Still, I am interested to hear what others think.Ignored
DislikedI was observing the GBP/USD on two broker MT4 platforms during the NFP this morning. 1st broker has fixed spread = 3pips, 2nd broker widens spread = 12+. During normal market conditions, they are within 1pip of each other, and the 2nd broker has a spread of 4-5 pips. This morning ,after the release, I noticed a huge gap between the two brokers. For instance:
At the same exact time/second:
1st broker: 1.9912/1.9915
2nd broker: 1.9871/1.9883
The 1st broker increased their pricing before the 2nd broker. What I would have liked to do was, at that instance, simultaneously, Buy at the 2nd broker at 1.9883 and sell at the 1st broker at 1.9912. When the market calms down and the spreads go back to normal, wheather it be 2 min or 2 hours, it doesn't matter, I would close both positions with both brokers simultaneously. I have noticed these quote discrepancies on numerous occassions. The end result would have been +31 pips.
Here's what I need, and can anyone program it?:
I need a program that will observe the pricing on both platforms and when the difference between the lowst ask price of both brokers and the highest bid price is greater than 15 pips (you can make this what ever you want), place those orders.
Here's the catch. In order for this to work and not screw us, the orders need to be filled instantly at those prices. I was thinking a limit order would work better, versus a market order.
What are your thoughts, comments, feedback?Ignored
DislikedForgetting actual arbitrage for a second...let's presume my broker quotes 1.9950 for the GBP and I KNOW the price is actually 1.9900.
My question is: Is it legal/fair to sell x amount short at 1.9950 knowing that my broker will be forced to correct the price, making me a huge profit?Ignored
DislikedIf you know ahead of time that the second broker lags the price of the first broker by X amount of time, then in your example, why not just buy at the second broker? What is the need to sell with the first broker?Ignored
Dislikedthat makes no F-ing sense, trading FX IS EXPLOITING that's why we do it? someone plz tell me i'm Right.
FX is all about exploitation. Do i have a point?Ignored
DislikedMy definition of trading is arbitraging – everything else is either investing or simply getting ripped off.Ignored
DislikedIf you know ahead of time that the second broker lags the price of the first broker by X amount of time, then in your example, why not just buy at the second broker? What is the need to sell with the first broker?Ignored
DislikedI do something similar, and I just trade with one broker, knowing that it is the slower one. You can make a lot of money doing this, and quite safely too. Let's just say the broker did take your money away, you are losing opportunity and some time, (maybe even your ego).
I made $5000 using 20 lots, 25 pips on NFP today. Why not take advantage of it if I can? And I agree that if they don't want this happening, then they better make the system faster with faster execution and faster quote to the point where there is no more "requote".
However, I want to say that in the end, you want to learn how to trade properly.Ignored
DislikedI have been making money the same way myself. Unfortunately the slow broker has caught up to the fast broker and the opportunity is not there anymore. Oanda is a slow broker but there spread during news is 20 pips.
Could you tell me your brokers millcake?Ignored