forex arbitrage?

[MickMason]

When the EUR/USD increases by ten pips or points, the trader would be down $100 on the position. However, since USDCHF moves opposite to the EURUSD, the short USDCHF position would be profitable, likely moving close to ten pips higher, up $83.40. This would turn the net loss of the portfolio into minus $16.60 instead of minus $100. Of course, this hedge also means smaller profits in the event of a strong EUR/USD sell-off, but in the worst-case scenario, losses become relatively lower.

Not forgetting that Swissy can move up to a third more than Eur/Usd......


Mick

[IronDog]

Originally Posted by roycetrade

Any info would help, such as some pairs moving earlier than others generally do.

for example, usd jpy moves up real fast and then a few minutes later the euro usd drops similarly, or is it always simultaneous, any info on arbitrage in forex markets would be greatly appreciated

I am trying to cover this in some detail on my forex research site. Not all pairs have this feature (leader-follower) but some do. Those that do, do not necessarily do it all the time. This stuff is "not supposed to exist" if the markets are "efficient". This makes it so much more fun do discover. One has to be very careful discriminating random features from the regular ones though. One has to do a lot of simulations with random time series to be able to tell what is random and what is not.