Triangular Arbitrage with Bid - Ask Quotes

A demonstration on conducting Triangular Arbitrage using the Bid - Ask FOREX quotes

Category:

Education

Tags:

• finance
• international finance
• triangular arbitrage
• Bid - Ask Quotes
• Bid rate
• Ask rate
• Bid Price
• Ask Price

[mikkael07]

Thanks a lot for ur video ,very helpfull...i got one concern. what makes us decide if we have to buy or if we have to sell.

for example for the transaction u said we're buying Yens. why not not selling U$.

Is there a difference ? Thanks!

[csbhatnagar]

@mikkael07 Buying Yen with $ is the same thing as selling $ for yen. There is no difference. If you want to sell $100, you will need the bid price for a $, which can be found by taking the reciprocal of the ask rate for a Yen. Therefore the bid price for a $ will be 1/0.0108. If you wish to sell $100, you can get 100 x 1/0.0108 = 9259.2593 Yen for them. This is the same result that we got in the video because essentially, we have still divided 100 by 0.0108.

Hope this helps.

[analyzeee]

why do we purchase yens?....cant we sell $ at bid rate to convert in to yens?....

[csbhatnagar]

@analyzeee You can do that too. But please note that for doing so, you need a bid rate for dollars. The information given in the video example is telling us the bid and ask rates for yen. However, you can easily find the bid rate for dollars by taking the reciprocal of the ask rate for Yen, which will be 1/0.0108. You can sell $100 at this rate to get 100 x 1/0.0108 = 9,259.2593 Yen.

Hope this clarifies the matter. Essentially, buying yen is the same thing as selling $.

[4XFX]

How can you use this method in currency trading. I am using metatrader platform

If I enter a BUY yen BUY Pounds and SELL US$ trade how can I get a profit from it

[csbhatnagar]

Hi,

I haven't used the metatrader as yet. If you have, maybe you can educate me on how to use the idea of triangular arbitrage to get some profit through the software.

Meanwhile, I have downloaded the software and getting my hands dirty :) Will ping you once I get familiar with it. Of course, any help is appreciated.

Thanks

[ericmaza]

bravo

[Mrthiennnn]

I think you should apply and teach at my university, because my lecturer is SHIT

[mmagnaye]

Thank you so much for your crystal clear explanation. It's the one I've been searching for for nearly over a year now :-)

[elggaato]

Hello there, your videos are greatt! Wish you were my teacher ;-)

By the way, for this exercise you said we could go from usd to pound then to yen and then back to usd, I tried but i get a lower amount then 100$. Can you help please??

Thanks

[LUKIS1612]

Tks!! was a greate class!!!