Foreign Exchange Currency Calculator for Arbitrage Trading

Arbitrage opportunities appear every now and then. A foreign exchange currency calculator, and the correct data analysis can identify these hot opportunities.

Using a Foreign Exchange Currency Calculator Spreadsheet

A foreign exchange currency calculator spreadsheet is a handsome tool, which you as an arbitrage trader will have to devise and perfect. Arbitrage opportunities appear in the global forex converter mechanism. But they are short lived. They last for few minutes to several hours at most. Arbitrage opportunities are impossible to spot by visual observation of price on the forex charts. Arbitrage which offers the possibility for a profit, is always a brief opportunity. But it does exists. Whereas arbitrage for just breaking even on two opposite trades. So as to hedge total risk, is possible on a medium to long time frame. The arbitrage trader sets parameters for some specific formulas. And then checks the markets to see the value of these parameters. By checking these quickly on a spreadsheet, the trader can see if the arbitrage criteria are met or not. The most interesting concept is that of using arbitrage to hedge risk on Carry trades. So that almost all the risk of price movement is offset. But arbitrage in a very similar way can be used to hedge open losing trades through CFDs. And to finally recover much of the losses. Gold and AUDUSD are two such markets, where the risk of one, can be hedged through trading the other. There are specific concepts and formulas for measuring how thew two markets move. Then depending on what the open trade is doing (winning or losing), and what the main trend is. The trader can take appropriate action. In the case of losing on a trade in one market. An opposite trade on the other market (at the right size), can help limit lock open loss to a fixed amount. And possibly even recover much of the original loss. A foreign exchange currency calculator can figure things out in seconds. And give detailed guidance as to what the trader should do.

Making the Foreign Exchange Currency Calculator Spreadsheet

Making the actual foreign exchange currency calculator spreadsheet requires a lot of analytical skills. And also work on first ideas and formulas. This requires running past daily or hourly market data through the spreadsheet. And working with this data using hypothetical trades. The trader has to develop the parameters and set variables accordingly. So as to measure total risk at any one time. And then they will have to develop further ideas as to how to relate arbitrage strategies to directional forex signals. Because these directional trades provide the most profit in most cases. And even arbitrage traders implement these trades. They are just prepared to engage in hedging arbitrage for those trades, only if they become losers. Profiting from arbitrage directly, is possible too but the trader will miss to much if directional trades are ignored. As really risk-less arbitrage does exist, but the profit margins are usually too small. The biggest value of arbitrage is for hedged trading, and recovering losses. But one cannot go this far before fully understanding risk-less arbitrage theory.