The best arbitrage software for your needs

We often receive the same question: which arbitrage software would you recommend that I use, and should I go with Latency or Hedge (2-legs) arbitrage?

It is not so easy to answer this question, but we will try to provide you with some advice that will help you find the best solution for your individual needs.

The difference between FIX API and MT4 accounts

First of all, I would like to explain the difference between MT4 and FIX API accounts. Although it is unnecessary to talk about MT4 accounts, a lot of traders know next to nothing about FIX API trading, or they may have heard of it but are afraid to try something new.

There are many benefits to using FIX API. You will have total control over the process of transferring and receiving data without any kind of intermediary or middleware software. Compare this with the MT4 execution chain: Client Terminal => MT4 Trade Server => MT4 Bridge => Aggregator => Liquidity Provider.

The one problem that you will face if you want to open a FIX API account is that the broker will usually require a minimum deposit of $3,000 or more. For that reason, this type of account might not be appropriate for every single trader out there. If you want to use your MT4 EA on FIX API account, you need FIX API Trader

Explaining Latency (1-leg) Arbitrage

Latency arbitrage compares quotes from a slow broker with a fast feed, and opens orders only with the slow broker when an arbitrage situation arises. I would compare this type of arbitrage to a time machine. We can see the trend or movement of the price of a given instrument with a fast broker a few milliseconds before we get to see the same thing with a slower broker, which gives us the opportunity to exploit the lag by opening an order in the direction of the movement with the slower broker. If you use BJF Trading Group Latency Arbitrage Software, you do not need to have an account with a fast broker, because we provide a fast feed from several sources free of charge. You need only have an account with a slow broker. You can use the software for trading in MT4 accounts and FIX API accounts as well.

Explaining Hedge (2-legs) Arbitrage

Hedge arbitrage compares quotes between two brokers and opens orders when a price difference is detected. The orders are opened with the two brokers simultaneously, but in the opposite direction. Then, once the opposite price difference is determined, the software closes the orders. For this type of arbitrage, you need to have two accounts with two brokers. You can use the software for trading in MT4 accounts and FIX API accounts as well.


Hedge vs. Latency Arbitrage: Pros and Cons


Latency (1-leg) Arbitrage

Hedge (2-legs) Arbitrage

Pros: Cons: Pros: Cons:
Only one account is required It is more easy for the broker to identify arbitrage activity It is possible to control slippage using limit (FOK) orders Two accounts are required
A minimal deposit is typically required ($100) It is possible to conceal arbitrage activity from the broker A higher deposit is typically required


Useful Links:

One-Leg Arbitrage Software

Two-Legs Arbitrage Software

FIX API Trader



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