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How to Choose Forex Arbitrage Software

March 19, 2020 11:23 UTC
Reading time: 8 minutes

This article will explain how to choose arbitrage software for Forex trading, as well as, why traders use arbitrage software, how Forex automation software works, the ins and outs of Forex automation software, how alert programs work, and more!

Arbitrage Software for Forex trading

Arbitrage Software In Forex

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

Arbitrage trading assists in quickly correcting temporary inefficiencies in prices, bringing them back in line across different financial markets, brokers, or various other 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 of performing 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 related 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-term 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.

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 within the FX community for arbitrage trading. They are as follows:

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, such as MetaTrader 4 (MT4), for example. Whenever the Forex arbitrage trading software indicates an arbitrage opportunity, it will immediately initiate the required 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 in taking advantage of trading opportunities, that only exist for 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 or not 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 a 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 many traders.

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Forex Automation Software

As we 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 also be wary of programs that appear too good to be true. A popular one to look out for is programs with large numbers of novice testimonials, who state that they have made huge profits.

There are good programs and there are bad ones. It's up to you to remain 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. This means that a trader should always be careful and attentive - especially with software labelled "Forex arbitrage software free".

Alert Programs

Alerts are notifications that you receive if anything occurs within your FX trading. They are designed both for individual traders, as well as for trade leaders and educators, whose intention is to broadcast important and relevant trade information to their 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 important events, and it 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 by email.

The available alarms or alerts within Forex arbitrage trading software cover a number of different areas. The first one is: account alarms. Changes in main account parameters include: 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 through material changes in live Forex market sentiment. Traders can track economic announcements such as inflation rate releases, balance of trade figures, unemployment rate figures, and many other types of economic data types that may have an impact on trading by using a Forex Calendar.

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:

The last one is time alarms. They permit a 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, emails, 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 all available with Admiral Markets' MetaTrader 4 Supreme Edition plugin.


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 to achieve exactly what you want to do in Forex trading. We hope to have provided you with some useful information, so that you know what types of arbitrage software are available.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

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