recently I have read a lot about FX Arbitrage and I'm very interested in making money by Latency Arbitrage.
For those who don't know what Latency Arbitrage is:
First, you have to have a data feed from a very fast Data Provider such as CQG or LMAX
Then you need Provider which has a slower data feed i.e. Market Makers
When the fast Data Provider's price has a larger movement and exceeds the spread from the slow Broker, then an EA should take a trade in that direction.
It's not like you win every trade because of bad execution sometimes, but you should be very profitable overall.
Sure, newbies who now heard the first time about this might think this is the holy grail.
But FX arbitrage is not new and many brokers are refusing withdrawals if you do so. They're not dumb, at least most of them.
Nevertheless, there are a few brokers who don't notice your arbitrage scalping if you are not making 40.000% account increase on one day.
There is another reason why I keep being interested in it: there are Market Makers who allow scalping, and you could be faster though if you have a fast VPS with a fast Data Feed.
I have seen a few bucket shops who could be exploited, and I would be so happy to take money from the criminals and I also think you would be too.
Now why am I here?
As you might have noticed, there are many people who offer their Arbitrage EA's for thousands of dollars, providing no trial or anything else. I really don't know what to think about it, there is one who even shows his Investor Password on live accounts. But as long as they don't provide a free trial for at least a few days, I don't want to throw away my money. If there is some interest, I can share the websites name, but as I don't want to advertise something, I will keep this to myself for now.
It is ABSOLUTELY IMPOSSIBLE to do this manually. Trades are taken within a few milliseconds so checking the conditions can't be done manually.
Also, I have not enough programming skills so I can't do it on my own. I just know that it can be done with FIX API on Empty4, but I have no idea how challenging it is to create such an EA.
This is not like any other Empty4 EA because it has to take data from external sources. So it MAY also be done by a bridge.dll.
I came here because I have seen such amazing programming skills on SHF.com .
I also hope there are members who want to help improving this EA, e.g. finding out more brokers where you could use arbitrage.
What should the EA do?
- Compare the price of the fast Data Provider with the slow one
- Check spread of the broker that you want to be trading with
- If price difference exceeds the spread, take trade in the direction of the fast one
- Exit trade when the price difference is lowering
- Be insanely fast. I know this is hard to accomplish, but the faster the EA is, the larger edge we have
As I want this to be a community project, the best would be to make it free .
But as I respect the programmers efforts and time, I don't mind paying for this EA, as long as I don't have to pay 1.000 dollars.
For improving this, I want to share this here so everyone can use it for a limited time which can be extended, like HGI.
I hope that I now have the interest of at least some of you. If you think my idea is rubbish, please let me know why.
Sincerely,
Patrick