Forex arbitrage is a trading strategy where a speculator attempts to make a profit by exploiting the inefficiency in currency pairs. This inefficiency is always self correcting, so the window of opportunity for profiting from the spread is very limited.
How to Calculate the Arbitrage
In order to calculate the arbitrage traders use forex arbitrage calculators. There are a number of free forex calculators available for download on the internet. Prior to initiating trades, speculators should use free demo accounts to see if trading the arbitrage can be a profitable venture. A trader would need accounts with forex brokers in multiple locations around the world. Most arbitrage techniques require trading in two to three currency pairs.
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