Choosing your Forex arbitrage software

Forex arbitrage trading software

The Forex market is full of different opportunities and different trading strategies. One area of interest is Forex arbitrage trading and Forex arbitrage software which can help implement this strategy. Arbitrage trading aims to profit from temporary market inefficiencies, which result in mispricings of similar assets in various markets, or with different brokers in the FX market. This method carries a high level of risk.

Arbitrage trading assists in quickly correcting those temporary inefficiencies in prices, bringing them back in line across different markets, brokers or various forms of the same financial instrument or asset. In fact, short-term imbalances, which form the opportunities for arbitrage trading, perfectly present a trader with the possibility to perform buy-sell trades simultaneously. Those trades lock in a small profit resulting from pricing variations. For instance, in the Forex market, there can be a minimal temporary discrepancy between the exchange rate for EUR and GBP and the two currency pairs, EUR/USD and GBP/USD. This can empower a trader to profit from simultaneously selling EUR/USD and buying EUR/GBP and GBP/USD. Since arbitrage trading opportunities tend to exist for a very short time period, often just a few seconds, for traders it is considerably time consuming to perform arbitrage calculations on their own. Traders therefore require sophisticated Forex arbitrage software that can instantly detect and consequently calculate arbitrage opportunities. The main goal of our article is to help in selecting your FX arbitrage software.

More about FX arbitrage software

Traders use FX software programs in order to identify arbitrage trading opportunities that they may take advantage of for potential profits. We can outline three types of software programs that are commonly used in the FX community for arbitrage trading. They are the following:

  • Automatic trading software programs
  • Alert programs
  • Remote alert programs

The first type of program utilised in arbitrage trading is automated trading software. This type of arbitrage software is loaded directly onto a trader's brokerage trading platform, MT4 for example. Whenever the Forex arbitrage trading software indicates an arbitrage opportunity, it will immediately initiate the needed trades on the trader's behalf. Programs of this type are designed to beat one of the primary challenges/tasks of arbitrage trading - the accurate and well-timed trade execution that is necessary to take advantage of trading opportunities that exist for just a few seconds.

However, traders who are not satisfied with having trades executed automatically, but in turn prefer to make all final FX trading decisions themselves, can use trade alert software instead. Just like automatic Forex arbitrage trading software, this kind of of FX software permanently scans various markets, instruments or brokers for arbitrage trade opportunities. When it identifies such an opportunity, rather than conducting the trade automatically, it will alert the trader of the opportunity, who will then decide whether to place the trade.

There are a number of traders, who rather than running their own FX software programs, subscribe to what is known as a remote alert service. A subscription to such service permits them to obtain arbitrage trading opportunity alert signals in the same way as they would by applying their own software programs. The distinction here is that the alert signals are supplied by software running at another location outside of the trader's own network or computer.

In addition, there are institutional traders who have some advantages over retail traders when it comes to arbitrage trading. For example, some of these advantages include faster sources of news, better equipment and more advanced arbitrage trading software programs. Nevertheless, FX arbitrage trading and Forex arbitrage software remain popular with a lot of traders.

We'll proceed by describing automatic trading software programs and alert programs in detail.

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Forex automation software

As we have mentioned earlier, automated FX trading software functions without the constant presence of a trader. This software scans the market for profitable currency trades, utilising pre-set parameters and parameters programed into the system by the software user. As a high level of Forex trading proficiency is not necessary here, all traders have a chance to benefit. You can check whether the software is suitable by looking for different customers' testimonials or reviews, which will highlight the benefits and drawbacks.

There are programs which offer a free trial period alongside other incentives to purchase. In addition, you will find free Forex arbitrage software quite easily, but the quality is likely to be debatable. Others may provide a free demonstration model to get the user acquainted with the chosen program. You should be wary of programs that appear too good to be true. A popular one to look out for are programs with large numbers of novice testimonials saying they have made huge profits.

There are good programs and there are bad ones. It's up to you to stay cautious and always look for evidence to back up claims of 95% winning trades. The publishers who care about the quality of their software will provide users with authenticated trading history results in order to show the potency of the software they are selling. However, remember that past performance does not guarantee the same result in the future. That means that a trader should be most careful and attentive - especially with software labelled “Forex arbitrage software free".

Alert programs

Alerts are notifications you receive if anything occurs concerning your FX trading. They are designed both for individual traders, as well as for trade leaders and educators who have an intention to broadcast important and relevant trade information to followers. Traders are able to produce rule-based alarms that prompt any number of actions. If we exemplify the Alarm Manager, we should outline that this software notifies the trader about events, executes trading actions like placing some new orders and closing concrete existing positions. In addition, this software can send updates to followers via SMS, Twitter or email.

The available alarms or alerts with Forex arbitrage trading software cover a number of areas. The first one is account alarms. Changes in main account parameters - i.e balance, profit and loss, margin, consecutive wins and losses and equity. There are also news or sentiment alerts triggered by calendar events, as well as by material changes in live Forex market sentiment.

Additionally, there are so called trade activity alarms, which notify traders about newly opened or closed trades, floating profits and losses on one's trades, along with trades without stop-losses. Another area is price alerts, which are prompted by changes, levels or breakouts in price. There are also tech indicator alarms, which are based on changes in indicators like ART, MA, MACD, Bollinger Bands, Stochastic, RSI and Swings. The last one is time alarms. They permit the trader to set a series of time-based alarms at different intervals.

The basic actions that are available upon an alarm being triggered include notifications (such as sending or broadcasting SMS, email or tweets), orders (traders can place new FX market or pending orders) and trades (for example, traders can close positions).

In addition, the alarms mentioned above are available in Admiral Markets MetaTrader 4 Supreme Edition offering.

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Conclusion

Choosing Forex software is a very complicated process and sorting through the vast number of programs the internet has to offer can be extremely time consuming. That being said, you shouldn't let this discourage you if this is what you want to do. You may find that the best Forex arbitrage software can help you achieve what you want in Forex trading. We hope to have provided you with some useful information, so that you know what type of arbitrage software is available. Be careful with what you choose - and be cautious not get caught up in a scam, but rather something that can prove useful for you.