In the vast majority of cases, scalping and arbitrage strategies happen to be more profitable than any other strategy. As a consequence, brokers whose business model is based on the B-book and on making money off deposits lost by traders – such brokers are not interested in clients who use scalping and arbitrage methodologies in their trading. For that reason, brokers can resort to certain wily techniques that prevent traders from making money. They might, for example, require the trader to keep an order open for more than 5-10 seconds, sometimes even for minutes. Or they might use add-ons that allow the broker to increase the execution time of an order.

What’s the best way to test an arbitrage trading program?

Let’s say that you have a program, an account with a broker, and you now want to test the program to make sure that your strategy will work.

It’s best to test the program in a demo account first. I understand that the trading environment in a demo account is inherently different from that in a real account, but if your results in a demo account are poor, it is highly unlikely that they will be different in a real account. Also, testing the program in a demo account will reveal any problems that may exist in your setup.

In recent years analyzing the trading results on our client accounts, we have found several factors that affect the arbitrage trading.

1. VPS or dedicated server;
2. Cross-connections;
3. Broker and account type;
4. Type of arbitrage software

Let's dwell upon each of them.

 The success of the latency arbitrage trading is largely dependent on the correct software setup. I would like to share some of my observations.

Recently we have been increasingly getting questions from our clients about which one arbitrage software is better and we would advise to buy, which one platform is better and what is our recommendations about broker. In this article I will try to provide all information which will help you make the right choice.

Over the past few years, interest arbitrage trade has increased dramatically. When dealing with a large number of customers who use arbitrage trading techniques, I can say with confidence that the arbitration methods still remain one of the most lucrative and low-risk. 

Although the trader needs to understand that he is facing a number of problems when using latency arbitrage. Like any profitable strategy, arbitrage is an unwanted strategy for forex brokers, especially if the dealer makes a mistake and switches an account into B-book, and in this case loses money.

Hedge arbitrage or 2-legs arbitrage software specially created for find arbitrage situations between two brokers and trade in fully automated mode. You can use software for MT4 brokers and FIX API Brokers as well.

You can create hedging pair for arbitrage trading between MT4 and MT4, between MT4 and FIX API, and between FIX API and FIX API accounts.