Triangular Arbitrage

Triangular arbitrage is the process of exchanging the initial currency for a second currency, then converting second currency for a third currency, and finally third currency exchanging back to the original currency. The triangular arbitrage only last for short span of time. The understanding of advance software programming and forex market is important to capitalize on gains in one currency versus another currency. Arbitrageurs doesn’t actually buy or sell any physical currency, but rather buys or sells a cross rate from one currency to another.