MA Arbitrage

In economics and finance, arbitrage is a series of logically related trades that profit by exploiting price differences of identical or similar financial instruments.

The MA Arbitrage indicator shows the difference in prices for two correlated instruments. It should be attached to the chart of one instrument, e.g. EURUSD, while the other instrument is specified in the indicator parameters, e.g. Ins2 = GBPUSD.

The period can be customized.

Use: If the indicator value has significantly decreased, it means that the correlation between the current instrument price and the second instrument price is very much behind the average value and you should buy this instrument. At the same time, the second instrument should be sold for the same amount. The price will very likely rise to the standard level or the price of the second instrument will fall to that level. Both trades must be closed simultaneously.

The Var parameter determines the line method: 0 - the indicator shows MA of price difference, 1 - correlation between the difference and the Ins1 price.