Arbitrage Trading vs Forex Trading
What are the differences and the similarities between Arbitrage Trading and Forex Trading?
It is not secret that many forex traders become arbitrage traders. But what could be the reason to move from forex to arbitrage trading? Let’s find out!
We all know the wolf of Wall Street – Jordan Belfort and many of us admire his skills and determination. But what makes him so special? He has a knowledge and his own strategy. He is ready to take risks and knows what will cost him for losing or winning. If you are practicing arbitrage trading this will sound familiar to you. These are also required skills to become a successful sports arbitrage investor. The difference here is that in arbitrage trading the risk to take is set to minimum and you can always cover your bet and get out of the situation with low losses. In forex trading, the risk is big and you can’t cover your shares and bonds if they start going down without any problems because there might be no one to buy them to “cover your bet” at the right moment. So there is bigger risk again.
In arbitrage betting in a case of mistake, you can always go to the other bookmaker and cover your bet with a small loss. The similar is that in both cases you can get a lot of money, but in arbitrage trading you can do it with less risk. It sounds great but the disadvantage of arbitrage trading compared with forex trading is that it takes more time for arbitrage traders to earn money compared with forex traders because there are some limits that you can’t go over. Bookies won’t let you bet millions in one match for sure and you have to do it in steps. In forex trading, you can go straight to the last step and “bet” (buy or sell) as much as you want. Of course, this could cost you a lot. This is one of the reasons for forex traders to turn they way to arbitrage trading. Most of them prefer to go through few steps to the profit but with less risk.
Now you might be wondering why arbitrage trading is so risk-free? Well, it is not quite risk-free. There are few problems that sports arbitrage bettors can meet during their arbing experience. But the good thing is that there is a way to avoid them. That’s why as it is mentioned above you need knowledge to become a successful arbitrage bettor. The risks you can meet are a limitation, moving odds, technical and obvious error – they are all described in the Complete Arbitrage Guides training program. You will need to spend some time reading, but this is the key to turn arbitrage trading from risky to risk-free investment!
In both forex and arbitrage trading, you need software/platform to see the moving odds/markets and the sure bets/shares and bonds. There are a lot of tools for both of them, but you need to choose the best one that suits your needs. In forex trading, the important thing is what functionalities and design will have the platform. In arbitrage trading is the same but it is also very important how this software delivers your odds. You need to choose software that will gather and deliver the odds as fastest it can. Why? Because the arbitrage situations exist only for few minutes and you have limited time do place the bets. Example for fast arbitrage software is OddStorm. They have the fastest sure bets delivery service 1-3 seconds for InPlay and 15 seconds for PreMatch. As they are the fastest service the main benefit is that you will see the arbitrage situations times faster than the users of the other sports arbitrage software’s and you will have the opportunity to place the bets before your competitors even know for its existence.
Let’s give a definition for arbitrage trading compared with forex trading. What is arbitrage? Arbitrage is the financial term for a situation where you are buying and selling at the same time, the same asset in two different markets in order to take advantage of the differing prices. For example, you can buy shares in a company on the Hong Kong Stock Exchange and immediately sell them on the London Stock Exchange and get profit for this. If you are wondering are there arbitrage situations in the financial market the answer is yes, but they exist for less than a second because of high-frequency trading.
In sports arbitrage betting the situation is different. The sports markets are moving times slowly than the financial markets. This means that you won’t have less than a second to take advantage of the arbitrage situation. You will have at least one to a few minutes or even hours. This is also one of the main differences between forex and arbitrage trading and it looks like the way forex traders become sports arbitrage traders – slow but sure.
The reason for this to happen is that the bookmakers (the markets) don’t care much for the balance like financial markets does. The mission of the bookmaker is to provide his clients with high and more attractive odds than his competitors (the other bookmakers) and that leads to broken balance all the time and is the reason why thousands of arbitrage opportunities arise every day. So don’t worry – there are enough sure bets for everyone!
One more important difference is that bookmakers can ban/limit buyers. This means that at the moment you start placing high stakes and start winning all the time, the bookmaker will limit you as you are not in his interest to keep betting. It doesn’t sound fair but no one likes to lose money and that’s why he will limit you immediately after you become a professional or just your luck starts working hard for you. The good thing is that will lead again to high and attractive odds for the others because the bookmakers won’t worry to provide us with it because you won’t be able to bet on it and take his money again. In forex trading, there is no one to ban you and you can buy and sell as much as you want.
The last and the best similarity between arbitrage trading and forex trading is that you can work from home. You can organize your time the best way that suits you. Many people want to work from home and arbitrage betting is the perfect opportunity. You can just sit back, relax, listen to your favor music and make money! You can be your own boss and it will cost you just a few days to go through our arbitrage training program and make your dreams come true.
So at the end, we can say that there are a lot of reasons to move from forex to arbitrage trading and Arbitrage Guides and OddStorm welcomes all of you. We will guide you through the process of learning and help you to build your own strategy like the wolf of Wall Street – Jordan Belfort did. So don’t waste more time and let’s make money!
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Posted on: "06 August 2015", by "Iliyan Lishkov "
Last updated on: "27 September 2016"