BTC arbitrage on forex brokers?

[pipeguy]

I've noticed that BTCUSD quotes are sometimes lagging from bitfinex and coinbase especially during sharp moves. Have anybody tried to use this advantage to trade BTCUSD on forex brokers. I found Tickmill which have 8 USD spread and Hotforex spread which I 20-25 USD. Others brokers like XM charge much higher spreads like 45 USD.

Do you know any brokers which have low spreads on this pair - 10 -15 USD or so?

And my second question is what are pitfalls in this trading strategy?

 

[abnormal]

[QUOTE = "pipeguy, post: 4715038, membro: 485203"]

And my second question is what are pitfalls in this trading strategy? [/QUOTE]




1, there are only some professional ecn.
every ecn to various engines of exchanges around the world.

2, you have to compete with these.

3, there are precise rules to become market makers on these ecn.

4, it is impossible to compete with low budgets and poor social networks.

5, if your intention is to cheat tickmill / xm know that you can not cheat scammers.

 

[ElectricSavant]

ohhh, yes you can...

[QUOTE = "pipeguy, post: 4715038, membro: 485203"]

And my second question is what are pitfalls in this trading strategy?

1, there are only some professional ecn.
every ecn to various engines of exchanges around the world.

2, you have to compete with these.

3, there are precise rules to become market makers on these ecn.

4, it is impossible to compete with low budgets and poor social networks.

5, if your intention is to cheat tickmill / xm know that you can not cheat scammers.[/QUOTE]

 

[pipeguy]

1, there are only some professional ecn.
every ecn to various engines of exchanges around the world.

2, you have to compete with these.

3, there are precise rules to become market makers on these ecn.

4, it is impossible to compete with low budgets and poor social networks.

5, if your intention is to cheat tickmill / xm know that you can not cheat scammers.

What's is the device under second point?

 

[abnormal]

What's is the device under second point?

laser. very low latency.

 

[pipeguy]

What I see is that on 50+ USD spikes, prices sometimes lag by 2-3 seconds. And spikes on cryptos are different from Fx spikes, because of liquidity, no sharp backfires which can put you in danger. And lag is visible without any software. The only issue is spreads it can eat profit.

 

[bone]

I've noticed that BTCUSD quotes are sometimes lagging from bitfinex and coinbase especially during sharp moves. Have anybody tried to use this advantage to trade BTCUSD on forex brokers. I found Tickmill which have 8 USD spread and Hotforex spread which I 20-25 USD. Others brokers like XM charge much higher spreads like 45 USD.

Do you know any brokers which have low spreads on this pair - 10 -15 USD or so?

And my second question is what are pitfalls in this trading strategy?

My guess is that there is a data transmission latency that makes the opportunity lag appear more pronounced than in reality. You would need the actual exchange order books on something really snappy - like 100x100 fiber minimum, to make a true assessment. Also, again just my guess but IMO the DRW crypto desk will have already collected that arbitrage - it’s what they do and they do it better than everyone else.

 

[pipeguy]

Thanks for input. What is DRW? Why I'm interested in this because due to low liquidity of crypto markets brokers tend to rely on several exchanges to get and transmit the quote to the terminal. For example we have spike on bitfinex while binance is muted. What price then should the broker quote to you? Law of one price says arbitrageurs will close the gap, but to which direction? Binance follows bitfinex or vice versa? Or this happens randomly?

Arbitrage on cryptos is far more interesting topic and some obvious conclusions applied in forex may not work there because of different market size. Or am I wrong?

My guess is that there is a data transmission latency that makes the opportunity lag appear more pronounced than in reality. You would need the actual exchange order books on something really snappy - like 100x100 fiber minimum, to make a true assessment. Also, again just my guess but IMO the DRW crypto desk will have already collected that arbitrage - it’s what they do and they do it better than everyone else.

 

[bone]

DRW is a privately held proprietary trading firm based out of Chicago that literally owns the crypto market in terms of arbitrage and market making. And I mean that sincerely.

 

[bone]

Arbitrage on cryptos is far more interesting topic and some obvious conclusions applied in forex may not work there because of different market size. Or am I wrong?

You are not wrong - however, IMO if you personally attempted it you would be getting picked off by DRW. Their ECN infrastructure and exchange collocation arrangements are ginormous.