We are always asked about the best way to use latency arbitrage. Many of our clients prefer mt4 latency arbitrage software or mt5 latency arbitrage software and I would like to tell you how to better prepare your account, and how to use it more effectively.

 Firstly,  latency arbitrage is more detectable by the broker than, for example, lock arbitrage. But if you use strategies, the period that you latency arbitrage goes undetected may be longer. Either way, it will be a week or two before the broker determines that it is latency arbitrage. The advantage of latency arbitrage is that it allows you to make money fast, and the more knowledge that you invest into preparing your account, the higher the chances of you making more money will be. For example, many traders can make 300%- 400% in profit in a very short period. 

How to test forex broker for latency arbitrage trading

You need to open an account, and if you don’t know this broker we suggest you make a smaller account and see which pairs work the best for latency arbitrage. If you are going to use this technique to test the broker,  it is best to open the account for someone else, as you want to use another account for yourself later on, when you can trade to the full extent. You open a small account, add the maximum amount of pairs, and wait for at least two trades on each pair. Brokers usually have currencies set up with one liquidity provider and cash CFDs with another. So for example, arbitrage could work for CFDs but not work for currencies, and vice versa.  You should also take a look at CFDs such as D30 and US30 and see what kind of slippage and execution time. This will give you an idea if this broker will work with currencies or CFDs.  We can also recommend to use FX Brokers Test KIT for slipage/execution time testing.

How to prepare account for latency arbitrage trading

Next, we can open an account for either you or someone else, and start preparing it. To prepare it, you will wait a couple of days and then try some manual deals and lose some money, after this, the broker will put you into B-Book, as the broker wants to make money on commission. Here it is important not to input a large deposit as then your account may be put into A-book automatically. After this step, you make a couple of trades with a small lot, and not hold your orders up for long. This is especially true with gold and CFDs as they are very volatile. These orders need to be the same day, short and using a  small lot. For example, if you use $1000 to trade and lose $100 dollars, you will be put into B-book. 

forex broker happy and unhappy

Latency Arbitrage trading

After this,  you need to add your account and configure strategies. We recommend lockCL and LockCL2 strategies, which have an advantage over the regular lock strategies as the orders are up for longer and the trader makes more profit.

latency arbitrage build in strategies comparison table

Pic.1 - Latency Arbitrage with build-in strategies comparision table

Once you add this strategy, you will start trading with a bigger lot so you make more profits in a short amount of time. This gives you the ability to make 300% - 400% profit and then open another account with the same broker under a different name, or an account using the same name with a different broker. In the previous step, whilst preparing your account, if you are trading manually or using an expert advisor to create the illusion that you are an unsuccessful trader,  you need to be using the same pairs that you are going to use to trade later on with our arbitrage software. These pairs will also be the same that you discovered to be profitable earlier on, using your smaller account.

If its a broker recommended by us we can already tell you which pairs are successful, so you won’t need this step, but we still recommend preparing your account the way that we have discussed in order to be successful using latency arbitrage. To prepare an account you will need around a month, as they will look at your starting trades, and then they’ll check a bit later, and repeat this process a few times. By taking a month you are completely tricking the broker into thinking that you are not a very successful trader. All-in-all, after you trick the broker and your account is put into B-book, it gives you a phenomenal chance of making lots of profit using our latency arbitrage software.

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