Introduction
In the realm of Forex trading, Expert Advisors (EAs) have revolutionized the way trades are executed. Among these, arbitrage EAs have gained significant popularity, especially for the MetaTrader platforms, MT4 and MT5. While both platforms support arbitrage EAs, there are notable differences in their functionalities and benefits. This article explores these differences and the advantages of using free arbitrage EAs for MT4 and MT5.
Latency Arbitrage EA for MT4 and MT5: Revolutionizing Forex Trading
Latency Arbitrage Expert Advisor (EA) for MetaTrader 4 (MT4) or MetaTrader 5 (MT5) is a sophisticated trading tool designed to capitalize on the latency differences between various Forex brokers. This EA is tailored for traders who seek to leverage technological advancements for profitable trading strategies.
What is Latency Arbitrage?
Latency arbitrage is a trading method that exploits the time lag in the price quotes between different Forex brokers. Traders using this strategy aim to buy a currency pair at a lower price on one broker and sell it at a higher price on another, profiting from the price difference.
How Does Latency Arbitrage EA Work?
The Latency Arbitrage EA for MT4 or MT5 operates by continuously comparing quotes between a slow broker and a fast broker. When a significant price discrepancy is detected, the EA executes trades, buying from the broker with the delayed quote and selling to the broker with the faster, more current quote.
- Real-Time Analysis: The EA constantly monitors and analyzes price feeds from multiple brokers in real-time.
- Automated Trading: It automatically executes buy and sell orders when a profitable opportunity is identified.
- Customizable Settings: Traders can customize various parameters, including trade size, latency thresholds, and risk management settings.
Advantages of Using Latency Arbitrage EA
- Profit from Market Inefficiencies: This EA helps traders take advantage of inherent inefficiencies in the Forex market.
- High-Speed Execution: Latency Arbitrage EA operates at high speeds, essential for this type of trading.
- Reduced Slippage: By swiftly entering and exiting trades, the EA minimizes the risk of slippage.
- Diversification: It offers a unique trading strategy that can be part of a diversified trading portfolio.
Considerations
- Broker Selection: Success in latency arbitrage significantly depends on choosing the right combination of fast and slow brokers.
- Technological Infrastructure: Efficient execution requires a robust technological setup, including a fast internet connection and ideally a Virtual Private Server (VPS) located near the brokers’ servers.
- Risk Management: Despite its potential, latency arbitrage involves risks, particularly related to execution and market volatility.
Conclusion
The Latency Arbitrage EA for MT4 and for MT5 is an innovative tool for traders looking to exploit price discrepancies across different brokers. While it requires careful setup and management, it offers a unique and potentially profitable approach to Forex trading. As with all trading strategies, it’s crucial to understand the risks and conduct thorough testing before implementation.
What are Free Arbitrage EAs?
Arbitrage EAs are automated trading systems designed to capitalize on price discrepancies across different markets or brokers. They typically buy a currency pair at a lower price from one source and sell it at a higher price at another, profiting from the difference.
Free Arbitrage EAs for MT4
MT4, or MetaTrader 4, is widely recognized for its user-friendly interface and robustness. Arbitrage EAs on MT4 are popular due to the platform’s extensive use and compatibility with a vast range of brokers.
- Simplicity and Compatibility: MT4’s simplicity makes it easier for traders to deploy and manage arbitrage EAs.
- Wider Broker Support: Most Forex brokers support MT4, providing more opportunities for arbitrage.
- Customization: MT4 allows extensive customization of EAs, catering to various arbitrage strategies.
Free Arbitrage EAs for MT5
MT5, or MetaTrader 5, is the successor of MT4 and offers advanced features. Its arbitrage EAs are more sophisticated, thanks to the platform’s enhanced capabilities.
- Advanced Strategy Execution: MT5 supports more complex arbitrage strategies, thanks to its advanced programming capabilities.
- Multi-Asset Trading: Unlike MT4, MT5 allows trading in stocks, commodities, and indices, offering broader arbitrage opportunities.
- Enhanced Charting and Analysis Tools: MT5 provides more advanced tools for market analysis, beneficial for arbitrage trading.
Source Code of Free Arbitrage EA for MT4 and MT5
Source code for MT4
Fast Feed for the MT4 Latency Arbitrage
To use this Free MT4 Arbitrage EA, you need to code your own fast feeder to get fast quotes from fast broker and write this quotes to MT4 Global Variables. MT4 Arbitrage EA reads quotes from Global Variables and compare them with slow MT4 broker quotes.
bool GetQuotes(double& BidFast, double& AskFast)
{
int connected = GlobalVariableGet("FEEDER_connected");
if (connected==0) return false;
if (!GlobalVariableGet("FEEDER_"+FeederSymbolName+"_BID",BidFast)) return false;
if (!GlobalVariableGet("FEEDER_"+FeederSymbolName+"_ASK",AskFast)) return false;
return true;
}Offset calculation
Some CFDs, Precious Metals and indices on slow MT4 broker have different, shifted by an amount that changes from time to time, quotes with fast feed quotes, and your MT4 Arbitrage EA should calculate offset between quotes and take it into account.
void CalculateAutoOffset()
{
int int1 = 0, int2 = 0, int3 = 50, int4 = 20;
double LmaxAsk = 0, LmaxBid = 0;
double SP = 0, SP2 = 0;
double AskOffsetSum = 0, BidOffsetSum = 0;
double LastLMAXBid =0, LastLMAXAsk=0;
string tmp_comment = "Calculating offset: ";
Comment(tmp_comment);
WindowRedraw();
bool ReadOk = false;
int3 = 30; //
int4 = 5; //
Print("Calculating offset...");
WindowRedraw();
while (int1 < int3 && int2 < 600) // read 40 quotes for offset calculation
{
ReadOk = false;
if (GetQuotes(LmaxBid, LmaxAsk))
// if (GetQuotes(g_BusConnectorID, LmaxAskAr, LmaxBidAr))
{
if (LmaxBid > Point && LmaxAsk > Point) ReadOk = true;
if (LmaxBid <= 0 || LmaxAsk <= 0) Print("Warning: incorrect quotes received... (Ask = ", LmaxAsk, ", Bid = ", LmaxBid, ")");
}
//check if the new quotes received from FIX
if (fabs(LastLMAXBid-LmaxBid)<Point&&fabs(LastLMAXAsk-LmaxAsk)<Point)
{
ReadOk = false;//old quote
}
if (ReadOk)
{
int1++;
RefreshRates();
LmaxAsk = LmaxAsk;
LmaxBid = LmaxBid;
SP = Ask - Bid;
SP2 = LmaxAsk - LmaxBid;
//AskOffsetSum += Ask - (SP - SP2)/2 - LmaxAsk;
//BidOffsetSum += Bid + (SP - SP2)/2 - LmaxBid;
AskOffsetSum += Ask - LmaxAsk;
BidOffsetSum += Bid - LmaxBid;
LastLMAXBid = LmaxBid;
LastLMAXAsk = LmaxAsk;
tmp_comment += "|";
Comment(tmp_comment);
WindowRedraw();
}
else
{
int2++;
Sleep(100);
}
if (int1 < int4 && int2 > 598) int2 = 0; // did get minimum 15 ticks - repeat
}
if (int1 > 0)
{
g_AskOffset = NormalizeDouble(AskOffsetSum / int1, Digits);
g_BidOffset = NormalizeDouble(BidOffsetSum / int1, Digits);
}
if (PrintDebugInfo)
{
Print("CalculateAutoOffset() -> AskOffsetSum: ", DoubleToStr(AskOffsetSum, Digits), ", BidOffsetSum: ", DoubleToStr(BidOffsetSum, Digits), ", Tick count: ", int1);
Print("CalculateAutoOffset() -> g_AskOffset: ", DoubleToStr(g_AskOffset, Digits), ", g_BidOffset: ", DoubleToStr(g_BidOffset, Digits));
}
Print("Offset calculation is completed ");
LastOffsetCalcTime = TimeCurrent();
g_OffsetCalculationComplete = true;
ShowInfoPanel();
}
dblLmaxAsk = LmaxAsk;
dblLmaxBid = LmaxBid;
dblLmaxSpread = LmaxAsk - LmaxBid;
dblAsk = Ask;
dblBid = Bid;
dblSpread = dblAsk - dblBid;
if (aMaxSpreadSlow>0&&dblSpread > aMaxSpreadSlow*Point) continue;
if (aMaxSpreadFast>0&&dblLmaxSpread > aMaxSpreadFast*Point) continue;
if (!g_OffsetCalculationComplete)
{
if (OffsetAutoCalc)
{
CalculateAutoOffset();
continue;
}
else
{
g_AskOffset = aAskOffset * Point;
g_BidOffset = aBidOffset * Point;
g_OffsetCalculationComplete = true;
}
}Difference to open
The heart of any MT4 arbitrage expert advisor is the piece of code that makes the decision to open an order when there is a delay in the quotes of a slow broker compared to the quotes of a fast broker by a specified amount.
dblLmaxAsk += g_AskOffset;
dblLmaxBid += g_BidOffset;
dblDiff = aDiffToOpen*Point + dblSpread;
if ((dblLmaxAsk - dblAsk)/Point>MaxDiffAsk)
{
MaxDiffAsk = (dblLmaxAsk - dblAsk)/Point;
}
if ((dblBid - dblLmaxBid)/Point>MaxDiffBid)
{
MaxDiffBid = (dblBid - dblLmaxBid)/Point;
}
CurrDiffBid = (dblBid - dblLmaxBid)/Point;
CurrDiffAsk = (dblLmaxAsk - dblAsk)/Point;
if (fabs(dblLmaxBid -dblAsk)/Point>10000||fabs(dblBid - dblLmaxAsk)/Point>10000)
{
Print("Warning: possibly incorrect quotes received... (Ask = ", LmaxAsk, ", Bid = ", LmaxBid, ")");
continue;
}
if (dblLmaxBid > dblAsk && dblLmaxAsk - dblAsk >= dblDiff && dblLmaxAsk > g_PrevLmaxAsk && dblLmaxBid > g_PrevLmaxBid) // BUY
//if (dblLmaxBid > dblAsk && dblLmaxBid - dblAsk >= dblDiff && dblLmaxAsk > g_PrevLmaxAsk && dblLmaxBid > g_PrevLmaxBid) // BUY
{
if (TradePause>0&&(TimeCurrent()- LastOrderCloseTime)<TradePause)
{
//Print("=== TRADE IGNORED: "+IntegerToString(TimeCurrent()- LastOrderCloseTime)+" seconds passed after last close");
continue;
}
Print("Buy difference "+NormalizeDouble(dblLmaxAsk - dblAsk,Digits)+" detected. MarketInfo<<Fast/Slow Bid: "+
NormalizeDouble(LmaxBid,Digits)+"/"+NormalizeDouble(dblBid,Digits)+" Fast/Slow Ask: "+
NormalizeDouble(LmaxAsk,Digits)+"/"+NormalizeDouble(dblAsk,Digits)+" Offset Bid/Ask: "+
NormalizeDouble(g_BidOffset,Digits)+"/"+NormalizeDouble(g_AskOffset,Digits)+" Spread Fast/Slow: "+
NormalizeDouble((LmaxAsk-LmaxBid)/Point,1)+"/"+NormalizeDouble((dblAsk-dblBid)/Point,1));The Benefits of Free Arbitrage EAs
- Cost-Effectiveness: Free arbitrage EAs provide a cost-effective way for traders to explore and benefit from arbitrage trading without a significant upfront investment.
- Risk Management: These EAs often come with built-in risk management features, helping traders minimize losses.
- Learning Opportunity: For new traders, free EAs offer a learning platform to understand the dynamics of arbitrage trading without financial risk.
Conclusion
Free arbitrage EAs for MT4 and MT5 provide traders with an opportunity to exploit market inefficiencies. While MT4 EAs offer ease of use and wider broker compatibility, MT5’s EAs excel in advanced strategy execution and multi-asset trading. Choosing the right platform depends on the trader’s strategy, experience, and trading goals. As with any automated system, it’s crucial for traders to understand the underlying strategies and market conditions to make the most out of their arbitrage trading experience.