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Arbitrage in the foreign exchange market refers to the simultaneous buying and selling of currency pairs to exploit price discrepancies across different markets or platforms. Traders capitalize on these differences to secure risk-free profits, as they are able to purchase a currency at a lower price in one market and sell it at a higher price in another. This practice helps to maintain market efficiency, as the actions of arbitrageurs tend to align currency prices across various exchanges. However, due to the fast-paced nature of forex trading, such opportunities are often fleeting.

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