Frequently Asked Questions
Answers to most asked questions about the two Expert Advisors offered on site.
Arbiter Forex Arbitrage EA
1. Does forex arbitrage still works?
The expert advisor trades when market conditions for arbitrage are present, read more about the nature of the trading strategy in this blog post.
The term "Slow broker" does not mean slow connection to the broker, it means a broker with misconfigured trading server, which can be exploited by arbitrage. Also, the term "Fast broker" does not mean fast connection to the broker, it mean a broker with properly configured trading server which offer high quality quotes to traders. It is always mandatory to have the fastest possible connection to both fast and slow broker, since this reduces the latency, which translates into greater chance of profitable trade.
When testing the Arbitrage EA, consider the couple of things:
- Make sure you have 1 fast (using LMAX, Rithmic or FIX quotes) FX broker and 1 slow broker (usually newly opened brokerage business).
- Do not focus on major currency pairs, instead trade metals (gold, silver, platinum, palladium, copper), oil (crude, wti, brent, natural gas), indices (DAX30, Dow, S&P500, Nasdaq, CAC40, Bovespa, etc.). The reason for this is the nature of quotes - when dealing with currencies the brokers get their quotes from liquidity providers (usually large banks) and there is not much room for arbitrage here, because quotes are largely in equilibrium. However, when dealing with metals, indices, oil, the brokers get their quotes from institutions like CBOE, Xetra(in Germany for DAX30/GER40), NYSE and here we have room for arbitrage, because of the different implementations of access protocols (FIX, LMAX, etc.).
2. How to set up the EA for trade arbitrage?
- Attach the Arbiter EA on the chart of the instrument of slow broker you want to trade in mode "SLOW broker(server)" and fill the necessary fields in settings (most important ones are "Server Port", "Server Hostname/IP Address" and "Corresponding Symbol on Server" - symbol name is case-sensitive). Attach also the expert advisor on the fast broker in mode "FAST broker(agent)" and set the same fields. Keep in mind that the server's port number must be unique for every instrument. For example, if you want to arbiter 3 separate symbols, you should attach the EA on 3 different charts on both fast and slow broker's MetaTrader platforms and specify 3 different port numbers.
3. What are the best settings for forex arbitrage?
- The settings depend on instrument, you can take a look at the User guide section. Also make sure to watch the two YouTube videos on our channel related to Forex arbitrage.
- For example on Gold (XAUUSD) you should use 450-600 points (4.50 - 6.00 US dollars price move against your position) as Stop Loss and around 210-250 points (2.10-2.50 US dollars price move in your favor) as Take Profit level.
- For DAX30 (GER30) it is fine to set 1000-1200 points as Take Profit and 3500-4000 points as Stop Loss.
The above values assume the slow broker is 5-digit broker. General recommendation is to set Take Profit and Stop Loss according your risk management (2%-4% of account capital per trade) and ratio between Stop Loss and Take Profit to be around 3:1.
- The computer hardware on which MetaTrader platforms run (the more, the better). Generally, on modern PC with 16 Gb of RAM and SSD with high-speed Internet connection you can run flawlessly trade arbitrage within 10ms - and even lower if you run trading terminals on VPN geographically close to the brokers in question.
4. What are the requirements for the port number when using more than 1 instrument for arbitrage?
- Server port number must be unique for every instrument you trade. It is a communication gateway - the FAST broker platform communicates with the SLOW broker platform through this channel and sends quote-related data for the specified symbol. You can start with the default value (30303) and increase the port number by 1 after adding new instrument.
- Regarding other settings - price alignment is also important - bid/ask prices from fast broker (dotted lines) should be aligned on slow broker before trading. I recommend to align bid/ask before session start and before any trading takes place.
- Also do not try to arbitrage currencies, it is pointless, because the currency market is very efficient and cannot be easily exploited - large enough pricing gaps almost never occur. Concentrate on indices, metals, oil, gas, commodities, crypto.
- Read more about arbitrage trading at our blog (https://www.algotradekit.com/posts/post-what-is-forex-arbitrage.php)
5. How to properly adjust the initial price alignment offset between slow and fast broker?
- Since the quotes of the slow broker always try to catch-up quotes of the fast broker, we have to initially align them (set the equal starting point). If quotes from the fast broker are not properly aligned with the quotes from slow broker, false trading signals may be generated, leading to losing trades. Keep an eye during the trading session on the EA and - if needed - adjust manually this offset. Read more how to initially align the prices at the user guide section.
6. Are there any predefined set files for instrument XXX?
- No, the set files are not available, because even the same instrument is traded differently at a given broker, i.e. the set files cannot be universal. However, you can test and create your own set files for reuse. Follow the general recommendation regarding the position from above question.
7. Is it possible to trade instruments with different names at the slow and fast broker?
- The "Corresponding Symbol on Server" is the name of the trading symbol that should be used for arbitrage on the slow broker. The name of the instrument at the slow broker may be different from the fast broker, but it does not matter. For example, if the fast broker uses "BRENT_G1" for brent oil, the slow broker may use "XBRUSD" for the same instrument. To use arbitrage on the slow broker, you should enter "XBRUSD".
8. Can I keep the Price Alignment Offset at zero in EA settings?
- It depends - if initial prices from fast broker match those from slow one then setting the offset different than zero is unnecessary. Sometimes however you must match the quotes: observe the dotted lines from the fast broker over the chart of slow broker and try to adjust the bid/ask values from fast broker with the green/red + or - buttons as close as possible.
9. Is it possible to use Trailing Stop or Break-even with this strategy?
- The arbitrage strategy is not meant to use trailing stop - the profit targets are often inside the trailing stop range, so it is impractical to implement it. However, you can use the MetaTrader 4/5 build-in function for trailing stop - right click on already opened position and select "Trailing Stop" and set some value. If you reduce a bit your profit target, choose suitable broker for arbitrage, and use a fast VPN server geographically close to your slow broker - this will greatly improve trading profitability.
10. Can you provide a list with slow/fast brokers for arbitrage?
- Finding appropriate brokers should be conducted by experimentation, as different people might have different suitable brokers based on their geographical position or distance of their network to respective trading servers, one's hardware, reliability of the connection, etc. However, all customers with purchased license will get several brokers to experiment with. Keep in mind that this information is purely based on my own experience and I cannot be responsible for the future performance/trading conditions of those brokers, i.e. I cannot guarantee that fast brokers will remain fast or slow brokers will remain slow.
11. Is it possible to backtest the Arbiter Expert Advisor?
- No, you can't do it. The EA requires data from at least two separate brokers to transact, so back-testing is impossible.
12. Is it compulsory to rent a VPS for arbitrage?
- It is nice to have, but not mandatory. You can use the expert advisor from your home computer and since the trades are short lived, you can trade it only for couple of hours a day during the active sessions (or during news events) and yet earn a good living. It is not recommended to arbiter your broker all day long, it might put your account under review or decline to pay off your profits.
13. Is arbitrage allowed in all brokers?
- Some brokers allow forex arbitrage, some not. Read carefully the terms and conditions of your broker before trading.
14. Which broker should I trade with?
- The lower the spreads, the better, any regulated market maker or MetaTrader broker is the best option.
15. Could the broker destabilise my trading?
- Yes. Some brokers have special anti-scalping software installed on their servers, which may increase the slippage of your orders if they detect suspicious activity. If slippage becomes suddenly too high, disable trading on these brokers.
16. What account balance should I start with?
- As general rule, rather modest account balance is advised when starting with arbitrage. It depends on leverage mostly, but $250-$500 should be sufficient with leverage 1:100.
17. Do I have to purchase the expert advisor again if I change accounts?
- No, the purchase if one-time only and license number is valid for 5 IP addresses (if you at some point decide not to use given IP address, then inform me by email and I will replace it with another IP address of your chosing).
18. Do I need fast Internet connection for arbitrage?
- Absolutely, the faster, the better.
19. In which trading session it is profitable to do arbitrage?
- GER30 should be traded only during London session, XAUUSD, US30, SPX500, NAS100 should be traded only during New York session. No other instruments are recommended for arbitrage (even if it is very tempting to do so).
20. When and how can I take the demo of the Arbitrage EA for testing?
- You can demo test the EA at any time, just download it and use it on demo account and learh how to setup the EA on my Youtube channel. Also, detailed explanation about Arbiter EA parameters can be found on user guide page.
21. Can you provide the rules for successful arbitrage trading?
- 1. Try to trade not every day, but 2-3 days per week, during high volatility sessions and news events (that means trading DAX during London session and Gold / DJIA / SPX500 / NAS100 during New York session).
2. Use relatively small account size, lower than 2000 USD to stay below broker's radar and do not be greedy: trade with smaller lot size.
3. Mandatory set the Arbitrage EA in "Turbo mode" with "Gap Size (points)" parameter depending on market volatility with "Maximum Trade Duration" parameter between 3-6 seconds.
4. Complete full KYC/MiFiD compliance at the chosen broker (pay attention to what account documents your broker ask from you, if you find those requests strange - do not give your personal details and close the account, most probably the broker is fake or unregulated).
5. Don't be greedy, stay close and monitor how the Arbitrage EA trades - do not run the EA on autopilot, sometimes the best trading strategy is not to trade.
6. Pay attention to "Gap Size (points)" parameter since market volatility changes during the day and you have to follow up, if there is a gap between quotes of slow and fast broker more than selected amount, a trade will be executed. Change this parameter according the symbol you trade and consider the digits after decimal point (1, 2, 3, 4, or 5) of the symbol.
22. Can we have several fast brokers open at the same time sending quotes to one slow broker?
- Yes, you can run multiple fast brokers at the same time, each fast broker must use a separate (unique) port number, for example - XAUUSD(FastBroker1) uses port 30320, XAUUSD(FastBroker2) uses port 30321, etc. At the slow broker you have attach 2 Arbiter Forex ArbitrageEAs and set for each of them the appropriate port number and corresponding symbol name as usual, i.e. the slow broker will receive quotes from various sources for the same instrument and it will open a trade when valid signal is received.
23. What is the maximum drawdown and % of profit per month of the Arbitrage EA?
- There is no straight answer - regarding the drawdown - it depends on the following factors: market volatility, instrument chosen for trade, lot size, account size, broker's conditions (spread, trade execution times), EA parameters, etc. Usually on 5000$ account and really slow broker (i.e. at least 75% of the trades are profitable) with lot size of 0.5 when trading XAUUSD with margin 1:200 you can expect to gain 2000$ from about 40 trades in 2 weeks.
24. Is it enough to download and test MT4/MT5 demos and see if they are suitable for arbitrage?
- Most of the times it is enough to test the demo of the MT5 to get confirmation about possible arbitrage of particular broker, since the MT5 real and demo server reside on the same physical hardware (the technology used by MetaQuotes is such that it cannot be otherwise), so the demo and real server share the same operating system, computer memory, internet connection, server location, etc - i.e. all parameters which are important for the broker's performance.
Now, for the older version - MT4 - this is not the case - the demo and real server are not the same and they can be (and actually are) physically separated machines - with their own hardware, operating system, internet connection, execution times, server location, etc. Of course, the best option is to perform tests on real account, because this way you can get an idea of real execution speed and slippage of particular broker.
25. Is an MT4/MT5 LMAX account required to use the software and access fast broker quotes, or is there a built-in connection to a fast broker within the EA?
- The Arbiter Forex Arbitrage EA gets its prices from a broker chosen by the user, and doesn't have a built-in connection to a specific quotes provider. It's not necessary to use LMAX as the fast broker, as there are other options with similar quality prices and easier account opening requirements for individuals.
26. Is it possible to pass the challenge of prop-firms like FTMO or MFF with the Arbitrage EA?
- The short answer is yes, if and only if, your fast broker is faster than the prop-firm's server.
27. Do you pass tests/challenges of prop-firms on behalf of clients?
- Currently I do not provide such challenge passing service since I do not have time, but in the past I've passed the challenges of First Class Forex Funds on behalf of my clients. Basically the challenge of any prop-trading company which uses Eightcap as introducing broker can be passed without problems.
28. Why don't you arbitrage currency pairs?
- The FX currency market is very efficient nowadays and pricing gaps almost never occur between brokers, therefore we as retail traders cannot profit from price discrepancies with arbitrage.
29. What type of broker allows arbitrage trading with EA?
- Forex arbitrage involves taking advantage of price discrepancies between different forex markets or brokers, often through the use of automated trading systems or expert advisors (EAs). In some cases, brokers may prohibit or restrict such trading practices, so it's important to research and select a broker that is open to this type of strategy by reading the terms and conditions on the broker's website.
When choosing a broker for forex arbitrage trading, some important factors to consider include:
- Regulatory compliance: Look for a broker that is properly licensed and regulated in your jurisdiction to ensure that your funds are protected and that the broker operates in a transparent and ethical manner.
- Execution speed and reliability: Because forex arbitrage relies on rapid trade execution, you'll want to select a broker with a fast and reliable trading platform and order execution system.
- Market access and liquidity: Ensure that the broker offers access to the markets and currency pairs you want to trade, and that there is sufficient liquidity to support your trading volumes.
- Trading costs: Be aware of the broker's fees and commissions, as these can affect your profits when engaging in high-frequency trading strategies like forex arbitrage.
30. Can you provide a real account statement/investor password for real account?
- Investor password access cannot be provided for the following reasons:
1. Every real account at particular slow broker exist for limited period of time, often less than 3 months in order to stay bellow broker's radar;
2. The list of slow brokers, suitable for arbitrage is part of the purchase of the Arbitrage EA - if I provide such list, or even 1 broker from that list - then selling the software becomes pointless, because the most valuable part is the information, not the software.
I know what you are thinking - there are other expert advisors which claim to perform great on demo account - and you are correct - demo trading is not the same as trading on real account, simply because the broker's demo trading server works without slippage and deal confirmation. And in case of MT4 - it is completely separate server. In MT5 demo and real account server is physically one hardware machine, that's why I recommend testing on demo accounts on MT5 only platform - this way you will be sure that the trade execution will be the same before trading on real account.
Answers to questions common for both Arbiter EA and Copycat EA
1. Which MetaTrader broker offer high quality prices feed?
- The quality of the price feed offered by a broker is determined by a combination of factors such as the speed and accuracy of the data, the number of liquidity providers, the presence of slippage and re-quotes and the presence of a stable and low latency connection.
Here are some factors to consider when looking for a MetaTrader broker with a high-quality price feed:
- Execution model: ECN and STP brokers tend to offer more reliable price feeds than market maker brokers.
- Number of liquidity providers: Brokers with multiple liquidity providers tend to have more reliable price feeds than those with fewer liquidity providers.
- Slippage and re-quotes: Slippage and re-quotes can negatively affect the quality of the price feed. Brokers that minimize these occurrences tend to offer better price feeds.
- Latency: The latency of the price feed refers to the time it takes for the data to travel from the broker's servers to the trader's platform. Low latency can be beneficial for traders who rely on fast-moving markets.
- Regulation: Make sure the broker is regulated by reputable financial authorities, this will increase the chances of having a reliable price feed.
2. Can I have multiple copies from the EA installed on multiple MetaTrader platforms?
- Yes. If the accounts are yours (you cannot sell, re-sell, rent or lease the software purchased). Just make sure you read the Terms and Conditions of use and install the MT5 version of the EA on MetaTrader 5 and MT4 version of the EA on MetaTrader 4. Don't forget to enable DLL imports in terminal's settings.
3. I cannot attach the EA on MetaTrader 5 / MetaTrader 4 chart, because nothing happens, why?
- First, make sure you have the latest versions of the platforms installed. The Expert Advisor may not work at all on builds less than 1260 on MT4 and builds less than 2450 on MT5. Second, make sure you are using decent version of OS Windows, i.e. at least Windows 7 and your windows version is up-to date.
4. What is the "License Number" in EA settings?
- Once you purchase the expert advisor, you will receive an email confirming the successful payment. You will find your license number in this email, keep it safe. You will need to enter it in the settings field "License Number" in order for the EA to become usable on real trading accounts, not only DEMO ones. If the system detects malicious activity on your end (see Terms and Conditions for more details) the license number will be revoked and become obsolete. So play fair and the system will play fair too.
5. Do you provide assistance in installation and setting up of the EA?
- Yes, we can arrange installation and setup procedure after you book a support service. You have to provide me more details about the software/hardware and operating system, so I can be prepared for the installation. Usually I am available for assistance Monday-Friday (15:00 GMT - 19:00 GMT).