It can read prices from two different metatrader brokers and trade against the slowest one, opening and closing trades at a profit in less than one second. Profits depend on your ability to make a wise broker selection in terms of price feed and latency. Additionally, brokers regard latency arbitrage as snipping and tend not to pay out profits generated with this strategy. Latency arbitrage is a high-frequency trading strategy that allows traders to make instant profits by acting fast on opportunities presented by pricing inefficiencies between two brokers: it entails arbitrage forex trading earnings against the slowest broker knowing the future price in advance -less than one second-.
Boost your trading activity with the easiest Latency Arbitrage EA available, just like our customers have already done. Latency arbitrage is a low-risk trading strategy that allows traders to make a profit with no open currency exposure. It involves acting fast on opportunities presented by pricing inefficiencies between different Metatader brokers. These inefficiencies can be caused by liquidity providers or network issues on the broker’s side. Latency Arbitrage consists on connecting several Metatrader platforms using a single Expert Advisor, and trading price inefficiencies between them, without the need of placing an opposite trade on other broker. This can be done because Metatrader brokers do not deliver quotes at exactly the same time, and it is common to find differences of 1-2 pips and 1-5 seconds between them.
Latency Arbitrage needs a good internet connection and low spread brokers. Example of Latency Arbitrage The basic usage of the expert advisor is trading two different brokers against each other. The EA would take advantage of network or pricing inefficiencies between two brokers, sending short-lived orders and capturing 1-2 pips per trade. The expert advisor shares the last price quote and timestamp between all platforms, and attacks the slowest broker by knowing in advance the next price quotes to be received. The Latency Arbitrage EA only trades when the price difference is likely to cover spread, commissions and slippage.
Therefore results will be different for every user and location! Your goal is to find a suitable fast and slow broker combination, and trade against the former using price quotes from the first one. Top-liquidity brokers are very good as a fast broker but very bad to trade against. On the other hand, small market-making brokers with low liquidity are perfect to trade against. The following are great liquidity providers.