I want to know practice lot size for arbitrage in forex.
In theory if I want to triangulate EUR , USD , GBP
Let say here are their relationship.
EURUSD GBPUSD EURGBP
EURUSD=GBPUSD*EURGBP,
GBPUSD=EURUSD/EURGBP,
EURGBP=EURUSD/GBPUSD.
EURUSD Ask price is 1.17058
GBPUSD Ask price is 1.27390
EURGBP Ask price is 0.92345
Implied price calculation is as follow
EURUSD/GBPUSD = 1.17058/1.27390 = 0.91890 (implied value we get)
EURGBP = CURRENT MARKET PRICE is 0.92345 > 0.91890
So we can get profit if sell at higher price
BUY EURUSD
SELL EURGBP
SELL GBPUSD
I want to know is how much lot need to buy and sell to get profit in forex market.
How calculate profitable lot size for each pair.
At noon , when implied price less than current EURGBP price,
I traded as
1.5 Lot BUY EURUSD is + 171usd
1.5 LOT SELL EURGBP is -458 usd
1 LOT SELL GBPUSD is +137 usd
total is - 140 usd
So my lot size is wrong?
Arbitrage trade is simutaneously trade to get profit within short time.
How you trade arbitrage in market?
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Question about triangular arbitrage in forex, hopefully get an answer here
kyawswarlin, Fri Nov 20, 2020 3:49 am