The best practices for using arbitrage strategies

We have written this article based on feedback from our customers who use our Latency Arbitrage Software or Hedge Arbitrage Software. We want to give examples of basic errors and examples of appropriate techniques.

Hedge Arbitrage or 2  Legs Arbitrage

This software works very good in following brokers combinations:

  • FIX API Broker – MT4 Broker. This combination works very good and we have several positive opinions. We recommend for this combination MT4 ECN brokers;
  • FIX API Broker – FIX API Broker. Good combination and only one drawback:  you need to have accounts with 2 FIX API brokers;
  • MT4 Broker – MT4 broker. The same MT4 broker but 2 different feed (different Mt4 server groups like: EURUSD and EURUSD-fx) . This combination works good if your broker has different Liquidity providers (or different bridges)  for different symbols.   If broker has symbols like EURUSD and EURUSD-fx it means that broker has 2 different MT4 groups with 2 different trading conditions.

mt4-9

  • MT4 Broker – MT4 broker – different brokers works not good according possible errors and requotes.

Еhe biggest problem when using a FIX API broker is a high initial deposit, but some IB companies (introducing brokers) offer to open account with much more  lower deposit. (from $1000). Some brokerage companies require minimal commissions per month. For example LMAX require minimum commissions of $2500 per month.

You can use your other robots together with arbitrage to match this requirements. We have created special tool “FIX API Trading Software”  that allows traders to apply their favorite MT4 Tools, Indicators, and Expert Advisors  to work with FIX API market data and trading sessions. It works much more faster then Mt4 and can be used for High frequency trading, scalping system and for your own arbitrage systems.

If you are looking for MT4 (MQL4) or FIX API coding service, feel free to contact us: coding@iticsoftware.com

Latency or One-Leg arbitrage

The best results received our clients who use their  your own FIX API broker for fast feed (lmax for example) and VPS near slow broker (ping 0-10ms). They also use manual trading or expert advisors together with arbitrage system on the same accounts. It is also good idea to start using arbitrage system for PAMM account, when you have several investors. Usually brokers provide “no manual intervention” conditions for PAMM accounts.

 

 

 

 

 

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