The coronavirus pandemic has had a very large impact on the forex market. Due to the uncertain future caused by the virus, many investors started putting their money into the US dollar, causing the drop of the Euro, Pound, Australian dollar, Canadian dollar and many others.
On the market, there was also an exponential increase in volatility and spreads. In the asian session, we can see the disappearance of feeds of many brokerage companies.
This does not mean that you cannot trade on these markets, they still have enough volatility and liquidity to be able to use arbitrage and news trading. But there are some important specifics.
Video: Coronavirus pandemic impact on the Forex market
Firstly we believe that it is better to trade currency, not CFDs or indices. Currencies are less prone to the increase of spreads which are currently seen on indexes, cfd and metals. Due to this, it is much better to use a few main currencies to trade, and due to the high volatility, it will be enough to follow through with many arbitrage deals in a day.
Now about the settings of the programs. If we take a look at lock arbitrage or 1 Leg or Latency arbitrage, there is no difference in what needs to be considered. Firstly we need to change the difference to open to 50, on the currency you would like to trade.
The most effective could be considered as EURUSD, GBPUSD, USDJPY, and maybe the AUDUSD so you will set a difference to open at 50 on these .
Secondly, you need to set a spread filter which will help avoid the triggering of stop loss and frequent position entries. We also suggest setting this to 50 here and this filter on spreads and this will help avoid false entries and if the spread of fast brokers will be more than 50, the transaction will not be open.
Likewise, you can also set the max-spread on slow brokers to 60 or leave it at -1, which means that the filter is not on. We do not recommend decreasing stop-loss as this will cause greater loss when there is an incorrect enter.
Therefore it is better to leave it as is. So why should you set the difference to open to 50? Because there are many arbitrage situations, and if the difference is left at 20 the broker is able to notice that there is arbitrage trading going on. Due to the transition to self-isolation by brokers, as many of them now work from home, it has been observed that brokers are much less likely to notice the use of an arbitrage robot, therefore not being blocked as much by the brokers.
There are less dealers that are watching accounts, giving the trader a chance to increase profit on the market. We suggest you set the same settings while latency arbitrage trading.
Setting difference to open to 50 on currencies and set stread on fast to 50. Another important point is not to trade gold and cfd and indices as the spread is increasing. We also do not recommend trading during the asian session, only europe and america.
During the asian session we have noticed that the orders will not work, the broker does not evaluate orders in the right order, and sometimes the feed turns off which causes mistakes that lead to loss. You can set the time of trade in the hedging pair only for the american and european sessions. This is done here and will be set based on the time of your VPS. You also need to tweak the minimum order lifetime, we recommend that it is set higher, such as 60 or 120 maybe even higher, this will help you avoid that the program is discovered as an arbitrage robot.
Spread Stop Loss
Warning: We recommend to use it only if spread on fast feed higher then usual (like now). When spreads on fast feed and slow broker will be back to normal, you need to use standard SL or increase spread SL.
Stop Loss value = spread value x stop los value
Spread sl = 4
Spread = 20
SL = 20 x 4 = 160 points
- If your MT4 broker has spread much more lower then fast feed spread, we recommend you to use Spread Stop Loss = 4
- If your MT4 broker has spread approx. like fast feed spread or higher, we recommend you to use Spread Stop Loss = 2
Some important updates for VIP Lock Arbitrage
Some important updates for VIP Latency Arbitrage
Trading on News
Also trading on news also generates larger profits as the market reacts more urgently to any news, with a sort of panic, and this is especially seen on the news of Europe and USA and the movement is also more urgent with oil as well. We recommend trading using the triggers that we provide, and it is possible to trade with medium and high risk given the situation right now.. American news on gold, oil, and news on the GBPUSD and AUDUSD are seen to be especially effective right now. Thank you for listening, and we hope that this video will provide more insight on the steps you need to take during the current coronavirus pandemic.