Richard Kenneth M303_ Scott

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What is latency arbitrage in forex?

Latency arbitrage is a trading strategy that exploits price delays between different brokers or liquidity providers. Traders use ultra-fast systems to detect price discrepancies and place trades before the lagging broker updates quotes. While profitable in theory, latency arbitrage requires advanced technology, co-location servers, and extremely fast execution. Many brokers discourage or block this strategy, labeling it as unfair. It is mainly used by high-frequency trading firms with sophisticated infrastructure. For retail traders, latency arbitrage is rarely feasible due to technological and capital constraints.