Online-Devisenhandel

Online-Devisenhandel

By using our site, online-Devisenhandel agree to our cookie policy. This article was co-authored by Michael R.

Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. There are 6 references cited in this article, which can be found at the bottom of the page. Essentially the trader relies on a particular currency being priced differently in two different places at the same time. Trading forex arbitrage is not recommended as a sole trading strategy in forex. The foreign exchange market, commonly referred to as forex, is an international exchange for the trading of currencies. Each trade is both a purchase and a sale, as one currency is sold in order to buy another one.

Arbitrage is the practice of buying an asset in one market and immediately selling it at a slightly better price elsewhere. In theory, a given currency should carry the same price in different markets. Know how to use arbitrage to make profitable trades. Forex traders take advantage of minor price differences by buying currencies where they are less valuable and selling them where they are more valuable. This usually involves multiple trades of intermediate currencies in practice.

Intermediate currencies are other currencies used to express the value of the currency you are trading. In the real world, price differences would never be this extreme. In fact, they are usually fractions of a cent. Traders make money by trading in large volume.

Volume trading allows traders to make enough profit to offset transaction fees. Institutional traders rely on computers and automated trading to buy and sell currencies quickly enough to stay ahead of the markets. Know how to read currency prices. Market prices are expressed in a very specific way. As mentioned, currencies are priced in relation to other currencies.