Every year, more and more algorithmic trading strategies appear on the financial market, which are capable of trading in the financial market without additional involvement of the trader. Will there be any robots that control in the future the financial market? No one knows. But this advantage should be used today. Trading robots allow us to automate our process of analyzing the financial assets and searching for trading signals once and for all, so that in the future you will not have to work for the trading system, instead it will work for you. Surely, every fix api trader has repeatedly asked himself this question. I urge everyone not only to think, but to start acting in this direction.
Today, I will consider a trading robot, which is based on one of the most popular trading principles, namely the arbitrage principle – http://www.investopedia.com/terms/a/arbitrage.asp.
If anyone has not encountered this method, fix api arbitrage consists in committing speculative trading operations, which are based on the principle of discrepancies in price quotes between the same financial asset, but on different stock exchanges. And even in the forex market, this approach is already being applied, thanks to fix apiforex brokers, who set mark-ups on their assets and thereby create arbitrage situations themselves.
Returning to the robot, we will analyze this software – http://forexzzz.com/product/zzz-latency-arbitrage-mt4-advisor/.
This robot is based on the principle of unilateral arbitration and is a separate program that connects to your trading account on the fix api MT4trading terminal. Also, to reconcile the data, in order to reveal the arbitration situation, the program suggests to connect to another trading account, which will be used to compare their values. Moreover, the trading robot allows you to trade via fix api, i.e. a financial protocol through which you will compare data based on the most relevant information on the market.
Just imagine, the robot simultaneously conducts an analysis of the asset value on a financial protocol, and simultaneously it takes into account information on the trading terminal. As soon as there is a small discrepancy, which can be as low as 3-5 points, immediately a trading operation towards a delay is committed. Is it possible for a fix api trader to work this way during the entire trading session? I doubt it.
In order to understand the principle of the trading robot in more detail, I propose you to consider an example:
The value of the EURGBP currency pair in a fast broker is 1.2220, and at a slower one is 1.2225. As you can see, the difference was 5 points. Let it be with this discrepancy that the trading robot makes a deal. The goal may also be fixing for the price of a faster broker, or several points from the price of opening. Thus, this discrepancy is 5 points and is the yield for the algorithm. Then, the robot according to the fix api Latency Arbitragestrategy will sell the currency pair from the “slow” broker and fix the result at the price of the “fast” broker at the time of opening or some fixed value.
Despite the simplicity of the trading algorithm, it also has certain drawbacks. So fix api Latency Arbitrage is very easy to identify by the brokerage companies that also have robots to search for this kind of trading. After all, deals are concluded for less than a second and are committed by a large number. Thus, the broker can affect the trading due to an additional spread or delays. However, even today, algorithms are also being created that allow to bypass this moment and “mask” the results of the robot’s work.
I strongly recommend that everyone start automating their trading process or adding trading robots to trade on your investment capital. This will allow you to diversify the risks and improve the overall result of profitability.