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Tools for forex arbitrage

  • #1
  • First Post: Edited 12:11pm Mar 18, 2009 9:40am | Edited 12:11pm
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  • #2
  • Mar 18, 2009 10:02am Mar 18, 2009 10:02am
Quoting sunnytrader
Hi everyone.

I m a software engineer who stumbled upon the world of forex about a month ago when i attended an interview for a high paying financial company in Sydney. They wanted someone with good programming and analytical skills to write stategies to detect arbitrage oppurtunities. This was the first time i...
If Forex was a sure shot science.
Everyone would be a billionair.

Triangular Arbitrage is practical impossible for retail traders
because of the technical restrictions you mentioned. Slippage, Using Lots instead auf Units, Order Excecution etc.
It's much easier to learn how to trade properly than outsmarting the market with Arbitrage Model. If you don't have the infrastructure to do that I would not bother wasting my time one it.

Institutions mainly use the Dijkstra Algorithm to find arb opportunities.
http://en.wikipedia.org/wiki/Dijkstra%27s_algorithm
  • #3
  • Mar 18, 2009 10:38am Mar 18, 2009 10:38am
Thanks for the post sir!
As far as algorithms are concerned. I would like to stick with my own algorithm that uses combinatorial and lexicographic approaches. I am very comfortable with these approaches as they have helped me in finding sports arbitrage oppurtunities. But thanks anyways..the shortest path algorithm that u have mentioned might be better. I will consider that later.

At the moment i m trying to decipher what systems these so called arb trading firms use. These firms have several employees and arbitrage is serious business for them.
Are u trying to say that i will have to be able to buy directly from banks if i want to overcome difficulties of a retail trading system?
  • #4
  • Mar 18, 2009 11:00am Mar 18, 2009 11:00am
Quoting sunnytrader
Thanks for the post sir!
As far as algorithms are concerned. I would like to stick with my own algorithm that uses combinatorial and lexicographic approaches. I am very comfortable with these approaches as they have helped me in finding sports arbitrage oppurtunities. But thanks anyways..the shortest path algorithm that u have mentioned might be better. I will consider that later.

At the moment i m trying to decipher what systems these so called arb trading firms use. These firms have several employees and arbitrage is serious business for them....
I hate to put a damper b/c you sound motivated, but when someone has/is using an arbitrage system, NO one in there right mind is going to share that. Arb situations DO exist within the retail realm.

There are a few hints around these boards, you will have to do the hunting and searching though

Good luck
Mike
  • #5
  • Mar 21, 2009 6:55pm Mar 21, 2009 6:55pm
as has been mentioned, without the ability to interact with the tier one bankers, a retail trader doesnt stand a chance.

Once you can become an "institution" unto yourself, you will be able to arbitrage --- as a retail trader, I do not know of any way it can be made to work, as of this time.

mp
  • #6
  • Mar 21, 2009 10:46pm Mar 21, 2009 10:46pm
in actuality, ive found a number of excellent "custom indicators" for the MT4 platform that give full information on a large list of currencies, and the situations within them that lead to an arbitrage possibility --- what i refer to is the inability of the retail trader to profit WELL from these situations because of the limits of retail trading and the needed interactions with brokers.

Money can be made in retail, but to my way of thinking anyway, other forms of trading are so much easier and faster and provide better profits, that RETAIL arbitrage just doesnt really seem worth it.

and if one goes up into the more senior threads, there will be much about arbitrage that you may wish to look at.

gl

mp



Quoting mbqb11
I hate to put a damper b/c you sound motivated, but when someone has/is using an arbitrage system, NO one in there right mind is going to share that. Arb situations DO exist within the retail realm.

There are a few hints around these boards, you will have to do the hunting and searching though

Good luck
Mike
  • #7
  • Last Post: May 26, 2009 7:24am May 26, 2009 7:24am
It is very difficult to do it as a retail trader. I used the MBtrading fast demo feed vs. the Alpari UK slow live feed. I tried other feeds too like HotspotFX but MBTrading had the most accurate and fastest feed IMO.

When I demo traded it, I made loads of money. Then I tried it with microlots on the live account and 9 out of 10 were requotes. I finally ended up break-even with the trades which went through the system.

It remains difficult for a retail trader. Perhaps you might have a better chance with a script which calculates the difference between the 2 price feeds and executes and closes a trade for you.

Without that, stay away from it.
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