With the development of financial markets, various trading strategies developed: the toolkit, analysis methods and parameters for selecting points for entry and exit from the position were expanded. So simple algorithms were built up and scaled into complex trading strategies, and some systems were divided into several types that differed in logic and algorithm of trading operations, but they had one and the same idea. That only the MQL market base is worth (https://www.mql5.com/en/market), with different similar algorithms.
Arbitrage trading has also become no exception to this. And if before all the specification of arbitration consisted of the analysis of the value of the same financial instrument in different markets and the performance of trading operations on the exchange rate difference, today this idea is also implemented in many different programs, differing in their logic and specification. Significant interest in supporting software from the developers of automatic systems has made it possible to create several types of arbitrage trade:
• FIX API Latency Arbitrage
• FIX API 2-leg Arbitrage
• Triangle Arbitrage
Each of these types trades on the exchange difference of financial assets and does not take into account the historical dynamics of the instrument, but it has very different features and characteristics. Today, I’ll tell you about the subspecies of the FIX API 2-leg Arbitrage, namely Lock Arbitrage.
For this type of arbitrage trading, software was specially developed (http://www.forexzzz.com/product/forex-zzz-lock-arbitrage/), which allows for the automatic use of arbitrage trading.
What is the feature of Lock Arbitrage?
The trading algorithm is based on the principle of trading according to 2-leg Arbitrage, however it has a difference in holding the trading position. That is, the robot also analyzes a number of identical financial instruments on different stock exchanges, and if there are significant exchange differences (above the fixed parameter by fix api trader), the robot opens the “lock”: buying and selling. However, holding the position takes not a few seconds, but until the next return signal. That is, profit is fixed, and to retain a loss-making position, the transaction is re-opened on the account where the position is already open.
The value of the GBP/USD currency pair for a faster fix api forex broker will be 1.2415, while the slow broker will have a value of 1.2405. Let’s assume the necessary parameter (exchange rate difference) to open a position is just 10 points. Thus, the trading algorithm must sell to the first broker and buy from the second. In conditions when the transaction for sale (or purchase) is closed at the level of stop loss, the algorithm opens a new deal for sale, but to the broker where the transaction for purchase (or sale) is located. It turns out that the castle is accounted for in one broker. Thus, all trading activity goes to one broker and you get a “lock”, when the same currency pair opened deals in different directions.
The next stage is the search for new investment prospects, when, once again, the opportunity arises to perform an arbitration operation for the same pair. Then the profitable transaction is closed at the current levels, and a new operation is performed in the inactive broker. This allows you to keep the level of drawdown, which will not exceed a certain set percentage, which is an advantage of this type of trading. Moreover, the algorithm shows that the constant fixation of profits and the retention of the percentage of drawdown allow you to earn a stable fix on the market for fix api forex not only on balance, but also on means.
Lock Arbitrage Features
The software has a nice interface that allows you to conduct fix api trading directly from the program. Also here you can set the necessary parameters for trading. From the volume of the transaction, to the list of instruments that will be traded. Optimization of trading tools under your broker will allow using this software and trading according to the Arbitrage without-a-risk strategy of Lock Arbitrage on any brokerage platform.
Lock Arbitrage is, by right, one of the best types of arbitrage trading. After all, easiness of use and adaptive settings allow you to use the program according to this trading in combination with other trading strategies.