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Arbitrage between 2 brokers

  • #81
  • Dec 2, 2011 10:28pm Dec 2, 2011 10:28pm
Quoting taipan99
Your arb method is already available:

See video: http://www.f0rexarb.c0m/access-arbitrage-in-acti0n/

change 0 to o.
That particular arb method is fairly juvenile.

It's more fun if you have direct liquidity provider access--bypass the broker(s).
  • #82
  • Dec 2, 2011 11:50pm Dec 2, 2011 11:50pm
Quoting chrys
Hi nondisclosure,

one of the broker show me this message on the terminal: EURUSD terminal_1 EURUSD,M5: Last Error on Long entry is: 130

What mean?

Do you know the most fast/slow broker for run the arb tecnique?

Is possible use this ea on multiple currency?
Thank you for your work
130 - invalid SL Your broker doesn't support SL so close to price (usually about 10 pips)
  • #83
  • Dec 2, 2011 11:55pm Dec 2, 2011 11:55pm
I've developed arbitrage system on MT4 API (high speed)
I need 4-5 betta testers with arbitrage trading experience
  • #84
  • Dec 3, 2011 12:53am Dec 3, 2011 12:53am
Mine allows it.

Quoting stevegee58
Folks, just a friendly reminder that every broker specifically forbids this type of trading in their customer agreement. When you open an account with any of them you agree to not trade this way.

Brokers take this seriously because it amounts to theft akin to insider trading in the stock market. They do look for suspicious trading patterns and will suspend your account if they think your doing this sort of thing.
  • #85
  • Dec 3, 2011 12:55am Dec 3, 2011 12:55am
Absolutely! But not many people, including myself, have the capital to do it.

Quoting Ronald Raygun
That particular arb method is fairly juvenile.

It's more fun if you have direct liquidity provider access--bypass the broker(s).
  • #86
  • Dec 3, 2011 12:56am Dec 3, 2011 12:56am
I can plop it on my server in a VM and let it run. What do you need?

Quoting erforex
I've developed arbitrage system on MT4 API (high speed)
I need 4-5 betta testers with arbitrage trading experience
  • #87
  • Dec 3, 2011 1:03am Dec 3, 2011 1:03am
First, thanks everyone for your support. I really appreciate the high interest in this subject / system / forthcoming EA.

I've been incredibly busy lately. Holidays coming and w/ 2 kids, it's always a busy time. My job, which I actually love to do, has for some reason I still can't explain, has picked up by about 66%. It's keeping me on my toes.

I hope to get the first part of the new arb program in the meantime posted up here.

Until then,

Here's how to test raw TCP latency from your pc to the 4x server:
Ping: http://www.microsoft.com/resources/d....mspx?mfr=true
what we need is the 'ms' average. If you read the article (it's short), it'll show you what to do. This will help give you an idea of what brokers would be best for this system.

We also need to know what brokers allow 'scalping'. This one will take some research, but it'll come in handy to know. Why? I'm looking to do more than build a system and post it here. If we have brokers already found that allow scalping, we can use that information too.

So, lets start building the list of brokers. The ping times keep for your records as when we get to testing; we'll have a good idea of what we need.

So stay tuned! More to come!
  • #88
  • Dec 3, 2011 8:55am Dec 3, 2011 8:55am
Quoting nondisclosure00
I can plop it on my server in a VM and let it run. What do you need?
is it permitted to post e-mail address here?
  • #89
  • Dec 3, 2011 10:13pm Dec 3, 2011 10:13pm
Quoting nondisclosure00
Mine allows it.
Care to share your broker name that allows arb trading, thanks.

Over at forexarb.com , the guy claims that several US brokers are now ok with arb trading, which i do not believe. But i'll take a look and report back here.
  • #90
  • Dec 3, 2011 10:52pm Dec 3, 2011 10:52pm
Quoting bravester
Care to share your broker name that allows arb trading, thanks.

Over at forexarb.com , the guy claims that several US brokers are now ok with arb trading, which i do not believe. But i'll take a look and report back here.
Quote from following thread.
http://www.donnaforex.com/forum/inde...25521#msg25521

NO broker is gonna allow you to steal from them. Any broker that has a slower feed already knows that they lag the true interbank market and arbitrage trades are easy to spot. You might get away with it for a day or so but I doubt you'd ever get paid. They'll deleted the trades and kick you out fast. By their nature arbitrage trades wont last long enough for the broker to hedge them so they'll put you on manual execution as soon as they see this behavior and you'll be outta business.
  • #91
  • Dec 3, 2011 11:50pm Dec 3, 2011 11:50pm
Quoting Iceworld79
Quote from following thread.
http://www.donnaforex.com/forum/inde...25521#msg25521

NO broker is gonna allow you to steal from them. Any broker that has a slower feed already knows that they lag the true interbank market and arbitrage trades are easy to spot. You might get away with it for a day or so but I doubt you'd ever get paid. They'll deleted the trades and kick you out fast. By their nature arbitrage trades wont last long enough for the broker to hedge them so they'll put you on manual execution as soon as they...
I absolutely agree with that statement.
  • #92
  • Dec 4, 2011 10:56am Dec 4, 2011 10:56am
IBFX (which just got bought by tradestation).

Quoting bravester
Care to share your broker name that allows arb trading, thanks.

Over at forexarb.com , the guy claims that several US brokers are now ok with arb trading, which i do not believe. But i'll take a look and report back here.
  • #93
  • Dec 4, 2011 10:57am Dec 4, 2011 10:57am
You can. But do at your own risk.

Quoting erforex
is it permitted to post e-mail address here?
  • #94
  • Dec 4, 2011 11:00am Dec 4, 2011 11:00am
blah blah blah. I hear it ALL the time. But when I ask these people who have gotten "kicked off" for doing this; I ask them for proof. Show your account being closed by the broker. Show me the letter/email stating WHY you were kicked off. Show me you weren't getting paid for your profitable trades.

I've asked to about 14 so far that I've found telling me this. Out of those 14 ..... 0 have been able to provide proof.

So, I'm going to continue until it either happens to me, or there is proof.

Quoting Iceworld79
Quote from following thread.
http://www.donnaforex.com/forum/inde...25521#msg25521

NO broker is gonna allow you to steal from them. Any broker that has a slower feed already knows that they lag the true interbank market and arbitrage trades are easy to spot. You might get away with it for a day or so but I doubt you'd ever get paid. They'll deleted the trades and kick you out fast. By their nature arbitrage trades wont last long enough for the broker to hedge them so they'll put you on manual execution as soon as they...
  • #95
  • Dec 4, 2011 11:31am Dec 4, 2011 11:31am
Quoting nondisclosure00
blah blah blah. I hear it ALL the time. But when I ask these people who have gotten "kicked off" for doing this; I ask them for proof. Show your account being closed by the broker. Show me the letter/email stating WHY you were kicked off. Show me you weren't getting paid for your profitable trades.

I've asked to about 14 so far that I've found telling me this. Out of those 14 ..... 0 have been able to provide proof.

So, I'm going to continue until it either happens to me, or there is proof.
Please read up experiences on forexpeacearmy.com . Also, based on what you say i believe you havent run Arbs on Live broker accounts for any extended period of time successfully (correct me if wrong).
  • #96
  • Dec 4, 2011 11:32am Dec 4, 2011 11:32am
Interesting. I've also attempted a shot at an app like this before (c# + mt4 api) but when I didn't get the spectacular results I was hoping for I gave up on it.
  • #97
  • Dec 4, 2011 11:34am Dec 4, 2011 11:34am
Oh here's an example of what you might get:

Dear client,



"It has been noted that you are continuously requesting to open orders at previous or wrong prices. This may be occurring either due to poor internet connection from your side or a misuse of an expert advisor. We will proceed to temporarily block your account as per clauses 5.6 of the Terms and Conditions. Please contact [email protected] when you resolve this issue so we can re-activate your account."



5.6


The client accepts that FxPro reserves the right to terminate the client’s access to the trading platform(s) in order to ensure and/ or restore the orderly operation of the trading platform(s) and protect the interests of both the clients and the Firm; under such circumstances FxPro may, at its discretion, close any of the client’s trading account(s), according to paragraph 17.5 of the Client Agreement.





If your internet connection is fine, then there must be a problem with your Expert Advisor. Once this issue is resolved inform us in order to reactivate your account.





Regards,



Dealing Desk
  • #98
  • Dec 4, 2011 3:34pm Dec 4, 2011 3:34pm
A quick primer on arbitrage.

After reading through this thread it seems there is a lack of the proper definition of "arbitrage" when applied to forex.

Here is how I see it:

True arbitrage happens when there are two separate markets offering the same product for different prices.

Historically, the Chinese have favored silver, while the Europeans favored gold. A fairly popular method of trading back then would have merchants buying silver in Europe, trading silver for Gold in China, and trading that gold for more silver in Europe.

So, numerically:

Assume you get 2 silver for 1 gold in Europe, and you get 2 gold for 1 silver in China.

I acquire 1000 pieces of silver in Europe.
I trade the 1000 pieces of silver for 2000 pieces of gold in China
I trade the 2000 pieces of gold for 4000 pieces of silver in Europe.
I trade the 4000 pieces of silver for 8000 pieces of gold in China.

And the cycle continues until the trader died, was robbed, or otherwise couldn't continue trading.

When applying this to the Forex Market, remember that the forex market is made up of several liquidity providers each collaborating together to trade one currency for another.

Let's say there is one bank in the US, and one bank in Australia. Both banks are liquidity providers in the Fx market. They therefore receive news at different times. So assume this bomb (true story!) actually went off in Germany, thus crippling the german economy, and further crippling the Euro.

The US and the Australian liquidity providers generally find out about this information at different times, and their prices reflect this difference accordingly. This would give me an opportunity to buy some currency from one bank, and sell the same currency to another, all while profiting instantly.

Traditional methods of 'arbitrage' in the retail forex world involve the speed at which information travels as opposed to true arbitrage. Retail brokers have to go through a liquidity provider, who themselves have to go through a liquidity provider, before reaching an interbank who ultimately fills an order. This leads to some lag in the true price in the broker's feed, and what also leads to some enterprising individuals who would get a faster currency feed, which can 'predict' a broker's price as much as 30 seconds in advance. The trader would then merely have to watch the faster movement, and apply the trades to the slower feed.

This is what brokers do not like.

Now, considering the events around the world as of late, arbitrage opportunities are actually more frequently occurring again because of the differences between the speed information travels from the source to the interbanks.

The arbitrage opportunities are most obvious at the week's open, when each bank has factored in the weekend's news into their Bid/Ask. Thing is, each bank factors in the news differently, which leads to some instances where the Ask at one bank is greater than the Bid at another bank.

So to implement this method, you would simply need to find two brokers who have different liquidity providers, and place arb-style trades with them.
  • #99
  • Dec 4, 2011 5:48pm Dec 4, 2011 5:48pm
Over a year on 2 live accounts. Due to some strict settings, they've hardly made any money (putting in on average 2 trades per day doesn't garner that much attention).

But, they've money.

Quoting bravester
Please read up experiences on forexpeacearmy.com . Also, based on what you say i believe you havent run Arbs on Live broker accounts for any extended period of time successfully (correct me if wrong).
  • #100
  • Dec 4, 2011 5:50pm Dec 4, 2011 5:50pm
How in the world did you get c# to talk to MT4? MT4 can only handle unmanged code.

Quoting Ultimate6
Interesting. I've also attempted a shot at an app like this before (c# + mt4 api) but when I didn't get the spectacular results I was hoping for I gave up on it.
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