Bitcoin Forum

I recently found out about this form of trading, but never tried it. Can anyone with experience give me some hints? I mean is this algorithm they use successful? And is it true about having big gains?

You can read up the basics or main idea about leveraging here: https://www.finder.com/beginners-guide-to-leverage-trading-on-bitmex
If you are just total new with trading then its better not to risk up or tend to dive directly with leverage yet you would just simply burn out some money on it.
How it works? Then try to read up the link i gave and about the question on having gains,yes it can give out big gains if the market movement turns out into your favor but if not then your account will totally be blown.

Thanks. The link was very helpful. I'm not new to trading but never traded with leverage. It is interesting though.

Leverage and arbitrage are two very different things.

Arbitrage trading can certainly be profitable, but doing it manually is next to impossible. You are more likely to lose money than make any profit. There are whole networks of bots with various fiat and cryptocurrencies already loaded on to various exchanges, primed to take advantage of any arbitrage opportunities within seconds of them appearing. You can see this whenever there is a sudden large buy or sell order on a single exchange which creates a price difference between it and other exchanges. Immediately the bots kick in and the gap in price is closed within a minute or two. By the time you have even noticed the gap, it's probably too late.

To effectively arbitrage, not only do you need to have a bot doing it for you, you need to have significant starting capital. It isn't sufficient to make a trade on one exchange, withdraw your funds to another exchange, and make a second trade. The price differential will have disappeared by the time your withdrawal confirms. You need to have both bitcoin and another fiat or cryptocurrency (or preferably 3 or 4 different currencies) already loaded on to a number of exchanges. Storing so much money on exchanges obviously exposes you to a large risk in and of itself.

So sure, you can make gains with arbitrage, but it isn't risk free and you'll need bots to do it for you. If you set up the bot wrong, one wrong trade could wipe out not only your profits, but also your capital.

If anyone offers to use arbitrage to make money for you if you send them an initial "investment", be aware it is almost certainly a scam.

I have a bad experience with this trade. the price difference between exchanges is usually only a few minutes and you must know the time needed to make your deposite coin. If you do the wrong calculation you will not get anything.

You can most certainly  do arbitrage trading manually! The easiest way is via OTC (over the counter direct deals) and a fiat gate way exchange.  :)

It is a profitable trading tactics. Arbitrage is a method which looks for price difference in different markets and take profit from that price difference. However, it is next to impossible to manually control the trades in different markets/exchanges unless you keep funds in both of them! So arbitrage usually requires a big balance to start with as you will have to keep your accounts funded to reap that price difference benefit. Also you will need a bot account which will be connected with all your different exchange accounts and you can control them from one place! Then it is will become profitable venture for you! There is no algorithms that comes to play!

I suggest not to try traded with leverage if you are new in the normal trading because that will be too confusing for you to decide when you should enter and leave the market. That will be related to your skills so you can determine the right time to open and close your order and you can make a profit. You should learn about regular trading first, like what people did. Until you thought you have enough skills to try new trading, then you can try with leverage trading. Many people fail in leverage trading, that is not because they don't have skills, but they are too greedy to get bigger profit which we don't have to do that. As long as you can get a profit, no matter how much the percentage and that is a stable profit, it is enough to close the order and get the profit.

yeah, don't do it. specially if you are new to trading in general it is best to stick to regular buy low sell high strategy!

it is a strategy and yes it can be profitable (successful!). about 3 years ago i used to do it a lot in altcoin market. there is a lot of problems that you will face.
the first one is speed. Arbitrage requires being super fast so you will need a bot. i was using my own bot that i made and it was profitable but not that much.
the second problem is spread. you have to pay attention to the buy orders and sell orders. you want to buy from a sell order and sell to a buy order somewhere else. and those are the prices that you should consider.
the third problem is volume. usually it is not high enough to cover the risk and give you good profit specially if the price difference isn't that high.
and finally it is the issues with exchanges. sometimes the price difference happens just because the exchange has some issues. wallet not working, pulling a scam,...

not at all.

Thank you everyone! I really appreciate your time for giving me advice. I think I'll stick to regular trading for now and perhaps do some research about the bot trading. I'm sure I will eventually try it, cause that's the way I am. Lol!  ;D

I have not done Arbitrage trading since a long time but have surely tried it during the initial days of trading crypto and to be honest my experience was not so good with it.
We have to efficiently manage our accounts in multiple exchanges and Arbitrage trading is something that we can't do on a daily basis. There are limited opportunities to obtain profits from this kind of trading.
I was not able to acquire good amount of profits since I was doing all of it manually which lead to a shortage of time and hence less profits.
These days bots have become really good then they can automatically gain profits whenever there is an opportunity for Arbitrage trading.

FALSE. Arbitrage trading is meant for INSTANT profits but I guess you might have interpreted like BIG profits. Arbitrage trading is nothing but catching the gaps of price levels. No big algorithms are required but you need to watch carefully to figure out price gaps. It is like you might need to follow multiple exchanges or trading pairs and need to compare them to find an exact and perfect arbitrage trading opportunity.

Arbitrage trading opportunity may happen between an international exchange and your local exchange or within your crypto exchange but between different pairs. Hope you might have heard like Korean exchanges were trading BTC $200 ahead due to heavy local demand. This could be one real time example to understand arbitrage trading.

I not much do arbitrage for now. Because i think when coin have different price very far, it means there are problem with deposit or withdrawal from 1 of it. But in past, arbitrage really useful when Poloniex listed new coin. Price will pumped because a lot of people will buy from Bittrex and arbitrage it to Poloniex. It usually can happen so many times, and that is what people always wait.

Correct, if arbitrage is done correctly it is as if you could print money by yourself but the profits in each trade will be very small which is why you need big capital to even consider that form of trading, however there are many possible pitfalls that people can make and instead of earning profits they could lose money, one of the most obvious is that an exchange could have a BTC/USD pair exchanging for an higher price but that is because there are fears that the exchange could disappear as they disallowed fiat withdrawals and everyone is accepting a small loss to buy bitcoin just to get out of that exchange.

It is practically impossible to engage in manual arbitrage trading, therefore, there are semi-automatic services that provide price information from most exchanges, allow you to calculate possible profits and trade. I saw several such services and positive reviews about them, but I never used them because some of them look suspicious. Perhaps some of the more experienced traders will test a similar service and do a detailed review, this would help many here.

I never try to arbitrage trading because that will be too difficult for me. We need to have funds in each exchange so we can buy, send, and sell the coins. There is more than that, and you need to learn deeper, and that will not be easy to understand.

Maybe you can read more on this website:

Doing arbitrage trading is no guarantee to make a profit because you need to determine which coin you will use to buy, how big the gap price in each exchange. It is more complicated than the usual trading, and of course, you will also need experience before you can do arbitrage trading. I am not sure about big gains in arbitrage trading because I never try it. I heard from my friends if we are in the right time and the right place, we can make big profits. But that will be difficult to get in that position, so be careful.

Well, the best case of doing arbitrage trading is having two bank accounts in two different countries.

Usually that involves a lot of money to send and receive from those countries but if you could manage to do it then you could make a lot of money with it. For example, let's say you have money in an USA bank and you have one in German bank, that means if you send money from USA bank to coin base, buy bitcoin on coinbase, send it to German exchange, buy Euro with it and send it to your German bank and then send it back to your american bank you can have profits.

Now, all of this costs a ton of money along the way so you both have to have a lot of money to do it plus you need to make sure there is that much difference, that is why people that have money in third world countries do it and not EU vs USA like I gave example of.

Here are some arbitrage trading discussions in the past, maybe OP can read it and so as everyone for a refresher:

Arbitrage / Easy money for new people (https://bitcointalk.org/index.php?topic=1925055.0)
A Complete Guide to Cryptocurrency Arbitrage | BitRage (https://bitcointalk.org/index.php?topic=5134602.0)
Arbitrage (https://bitcointalk.org/index.php?topic=2497768.0)
Bot for trading - arbitrage (https://bitcointalk.org/index.php?topic=5122454.0)

You also need to understand that you need a bot to get a better success rate when doing arbitrage.  Also take note of the fee, as it might just eat your potential profit.

For now i think arbitrage really hard to get, usually if price between exchanges is far there must be a problem like people can't deposit or maybe another problem is come. And in other side, if people see price between exchanges is far, it will be fast to end. I mean people will start to buy and send and sell as fast as they can. That is why for now arbitrage is very risky.

There is something called as triangular arbitrage which is explained here in an article: https://medium.com/@BlockchainEng/cryptocurrency-triangular-arbitrage-november-2018-update-bfb00362ef21. Can not explain you much on it as even I an in exploring stage.

For arbitrage one thing that you can do is first fetch the rates of different exchanges through their API's and then compare them. If you find a considerable change available set an alert. This can be first step which can be tested and improved further.

Arbitrage was very profitable in 2017, that is prior to all KYC mandated exchanges and the used of the bot. If I remember correctly, there was a huge discussions about this one as well, people claiming to make huge money. However, as we have seen the market evolved, and the used of bot very important and obvious in the last 2 years, it's very hard if you are an inexperience trader to pull this kind of strategy. Profits are made in seconds and if you just hesitated for a bit, your potential profit could end up with a huge loss. I'm sure that they are still doing it as of today, but for newbies this is not advisable as it takes experience and knowledge just to pull this off.

Arbitrage trading is not the same as the new traders read the success stories on the medium pages. The hidden face of the arbitrage can hurt the inexperienced trader due to the requirements by the exchanges. The hidden orders and liquidity problems can decrease the calculated profitability after a few attempts.  The profitability of the arbitrage orders has to be higher than the calculated value, otherwise, the trading bots will suck the small percentages less than 2% from my own arbitrage experience.

You can calculate the profitability of the token listed on both IDEX and Kucoin. After checking the order sizes on both exchanges, buying from the low price exchange and sending the bought tokens to the Kucoin has to be done ASAP. The risk of losing arbitrage attempt depends on the speed of the blockchain(ERC-20 token confirmation time is around 10 min for 50 confirmation).

Arbitrage trading is more we move funds to other markets by utilizing the difference in price in each market, you must have seen in each market have a different value in each coin. I have done it before, the profit gained from the price difference is also deducted for the fee, so you have to really take into account the transaction and trading fees, for the algorithm nothing is certain, here you must know the fee in all markets if you want to conduct arbitrage trading.

I have experience with the arbitrage trading, but I feel that my experience is not good than others because in that time, my deposit coin was too late to arrive in the other exchange and that makes me get a small profit.
Arbitrage trading will difficult than leverage trading because we need to know how long the transaction will get confirmed from the network and the other exchanges so it could make us get lost.
What algorithm? I don't know what you mean.
Yes, arbitrage trading can give big gains especially if we can use the moment for sending and receiving the coin in the other exchanges. But that will not be easy as we know that the network will be busy to confirm the transaction.
I guess that not just you that will want to use the arbitrage trading because other people will do the same thing as you if they see a chance to make a profit from arbitrage trading.