What if the broker prohibits arbitrage trading?

Throughout the history of financial markets development, exchange speculators were looking for an ideal approach and ways of analyzing financial assets, as well as methods for completing trading operations. Some trading strategies have been replaced by others, and some have improved and work up to this day. But some fix api tradingtechniques have gained such popularity and reliability that forced regulators to limit their trading. Such a technique was arbitrage trading.

Arbitrage consists in analyzing the cost of the same currency pair of the fix apiforex market, but on different stock exchanges. Yes, we know that the forex market is open and everyone can join it. In fact, this is a big exchange. But under the term of “stock market” I mean brokerage companies. With the help of the algorithmic approach, this allows you to conduct an asset analysis by tuning in to find meaningful discrepancies and perform arbitrage trading operations.

You would agree that we often have seen a small exchange rate difference in the quotes of various fix apiforex brokerage companies. And it is on this exchange rate difference that you can earn. Arbitration concludes in determining the maximum exchange rate difference and the opening of transaction on the side of a slower broker (if you conduct arbitrage trading using the fix api Latency Arbitrage technique) or simultaneously on two platforms in the direction of the formed “spread” (if arbitrage trading is conducted using the 2-leg Latency Arbitrage). You can read about the arbitration strategies on the following link:

http://www.investopedia.com/terms/a/arbitrage.asp

However, the most brokerage companies oppose such an approach. And this is understandable. In our market, most companies earn from the losses of their customers. By trading in reliable brokerage houses, which give access to fix api, thereby they encourage algorithmic trading and arbitrage trading, in particular.

Two key reasons why companies prohibit arbitrage trading:

  • Arbitration conducts a lot of trading operations with a short profit taking. Some companies do not give the opportunity to enter their funds until a certain volume is traded;
  • Arbitration conducts risk-free trading. The absence of risks means regular earnings for clients, which in turn means a loss of a substandard company.

Given these bans, the traders began to look for an opportunity to make arbitrage transactions even where it is prohibited. Today, I will talk about the techniques that will allow you to conduct fix api arbitrage trading, taking into account brokerage bans.

  1. Change your trading principle to fix api 2-leg arbitrage. In case of Latency Arbitrage, such an algorithm is very simple to define and there are even special programs that allow to “catch” traders with this approach. As for the 2-leg arbitrage, such an algorithm is difficult to determine. Transactions open with a long period of withholding and may resemble speculative, not arbitrage trading;
  2. Trade through fix api.The very use of this protocol will indicate trouble-free trading, because all transactions will be delivered directly to the market, and thus, the broker will not lose money, but on the contrary, will earn from your commission.
  3. Use secondary software. There are already programs on the market that mask all transactions made by the robot. These programs will circumvent the bans of the brokerage companies and arbitrage trading. The program will mask the operations and will present them to the broker under the guise of transactions opened in a “manual mode.” An example of such a program can be viewed on this link: http://forexzzz.com/product/manual-trading-add-on/

These tools allow you to circumvent the bans of the brokerage company. Each of them will facilitate fix api arbitrage trading and will adjust the process in the right direction. If none of them doesn’t fit to you, you can always use the simplest way – change the broker company.

 

Leave a Reply

Your email address will not be published. Required fields are marked *