Forex arbitrage is a trading strategy that seeks to profit from differences in the prices of identical or similar financial instruments traded in different markets or locations.
For example, a forex trader might notice that the price of EUR/USD is lower in the London market than it is in the New York market. If the trader can buy EUR/USD in London and then immediately sell it in New York for a higher price, he or she will have made a profitable arbitrage trade.
Of course, forex arbitrage is not without its risks. For one thing, prices can change quickly, so it may be difficult to execute an arbitrage trade before the opportunity disappears. Also, some brokers may not allow traders to take advantage of arbitrage opportunities, as they may be perceived as being too risky.
Despite these risks, forex arbitrage can be a profitable trading strategy for those who know how to take advantage of market discrepancies.