Triangular arbitrage is the simultaneous opening of orders for three currency pairs. The direction of transactions and pairs are selected in such a way that simultaneously open positions insure each other. Due to this, you can open quite large lots, and the risk is low.
EURUSD – USDJPY-EURJPY
AUDUSD – USDCAD-AUDCAD
GBPAUD – AUDUSD-GBPUSD
The orders that are part of such a triangle are in constant motion. The Expert Advisor analyzes the real prices at the moment and calculates what they should be. If these values differ from the calculated values by a given amount, the Expert Advisor opens 3 transactions.
Example of a strategy:
1. We buy the EUR currency for the GBP currency – - EURGBP BUY
2. We buy the GBP currency for the USD currency – - GBPUSD BUY
3. We buy USD currency for EUR currency – - EURUSD SELL
The amount of profit on this goes to the plus, then to the minus, without going beyond a large framework, even with a very turbulent market. The Expert Advisor monitors the movement of currencies and closes all three at the right time with a total profit.
As a result, wherever the price moves, we are always insured! The essence of this strategy is that it can withstand any recoilless movements, and the deposit will not suffer. If you calculate the risks, then this is an unsinkable system !
Testing of multi-currency Expert Advisors is possible only in the MT5 tester. For MT4, testing is possible only on a demo account in real time.