Anyone have any good reading materials on arbitrage, or any strategies?
Basically what I mean by arbitrage is finding certain market environments where for a limited amount of time you have high probability trades with a good risk to reward ratio. You have to be able to spot these moments in the market and take advantage of them with good money management and a sound trading strategy.
Basically I want to discuss,
1) How to spot them.
2) How to take advantage of them.
One example of this is the way the EUR/USD has been bouncing off of the 1.6 level, making a very high probability trade if you go short anywhere above 1.5960, with a stop at 1.6000, and a profit target of around 1.5900. Being that this is just a 40 pip trade, risking 1%-2% per trade and making around 1R-2R, and repeating this several times, could be very profitable.
It's easy to talk about it after the fact, but I feel I spotted this inefficiency as it was happening.
Any one have anything to input?
Basically what I mean by arbitrage is finding certain market environments where for a limited amount of time you have high probability trades with a good risk to reward ratio. You have to be able to spot these moments in the market and take advantage of them with good money management and a sound trading strategy.
Basically I want to discuss,
1) How to spot them.
2) How to take advantage of them.
One example of this is the way the EUR/USD has been bouncing off of the 1.6 level, making a very high probability trade if you go short anywhere above 1.5960, with a stop at 1.6000, and a profit target of around 1.5900. Being that this is just a 40 pip trade, risking 1%-2% per trade and making around 1R-2R, and repeating this several times, could be very profitable.
It's easy to talk about it after the fact, but I feel I spotted this inefficiency as it was happening.
Any one have anything to input?
