Arbitrage trading

[Kara3]

Arbitrage is the strategy of taking advantage of price differences in different markets for the same asset. arbitrage is purchasing an asset in a market where the price is lower and simultaneously selling the asset in a market where the asset’s price is higher.

How to become a crypto arbitrage trader quick guide

_you must  have a crypto wallet.

_ $100 or more

   Find arbitrage opportunities

_Manually monitor cryptocurrency price on different exchange.

_ Use a crypto arbitrage scanner website or app to spot  opportunity.

       Executing the trade
_ Deposit fiat currency into the exchange with lower crypto price.

_Buy the crypto currency at a lower price.

_ Transfer the crypto to the exchange with higher price.

_sell the crypto at the higher price.

_ withdraw you fiat currency from the higher price exchange.

       Risk

_ Be mindful of rapid price changes.

_ watch out for exchange fees that can reduce profit.

_ consider liquidity risk that could make selling at a higher price challenging

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[kentrolla]

Indeed, Arbitrage is one of the best way to earn but it's not as easy as we think because you need to constantly monitor the market and need to have funds in multiple exchanges and checkout on coins which has arbitrage but while doing it we need to consider the withdrawal fee, the buy order price on exchange where you want to sell because there are times when buy order price is much more lesser than market price. This can work occasionally but not on a long term because considerable price difference will bein low volume exchanges where you will not find buyers and even if you find buyers your withdrawal fee will be more. There are some arbitrage sites which are fooling people to buy their package which is waste of money and time. I will create a post in regards to this shortly.

[Wapfika]

It’s very hard to secure profit on arbitrage trading for crypto since it’s to volatile and limited liquidity on order book. The price difference on every exchange is really tempting to arbitrage but the thin liquidity makes the price impact of your order too huge which is impossible to get profit.

Exchange also uses bot to sync on the market price which makes the order book always updated close to the average market value.

[Faisal2202]

_ Be mindful of rapid price changes.

_ watch out for exchange fees that can reduce profit.

_ consider liquidity risk that could make selling at a higher price challenging

I think to minimize the risk of raid price changes and the exchange fee, one should make a bot an automated one. That would do all the basic work for you and it will also minimize human error too. Like when we are making transactions from one exchange to another we sometimes forget to copy the new address and paste the last address which is a result of human error. And sometimes, people select the wrong Network of the blockchain for sending and receiving the amount.

These types of errors can be minimized by using the AI bot, but of course, we need open-source and trustworthy AI bots that, no one can tamper with them. But it is not that easy to find one. You must have to be good or at least have some knowledge of the API and IDE. Because the open source AI bots mostly exist on GitHub and people like me (just kidding) are not aware of it and how we should use it.

The risks that you have mentioned are the basic one, but what are your intentions here to make this topic, because it has been discussed here so many times but I think keeping the old knowledge up to date is also necessary.

[jossiel]

While it's a known style of trading that you can assure your profit. Are there members of the forum that's able to do this at this time?

Because if I am analyzing the market and the difference of the pricing of the crypto that I'll trade, I just can't find some good opportunity and it's hard to find it.

And that's why I am asking that since it's a known strategy in trading, is there someone that does this very often and if we may, know the exchanges where you're trading?

[ZAINmalik75]

It’s very hard to secure profit on arbitrage trading for crypto since it’s to volatile and limited liquidity on order book. The price difference on every exchange is really tempting to arbitrage but the thin liquidity makes the price impact of your order too huge which is impossible to get profit.

Exchange also uses bot to sync on the market price which makes the order book always updated close to the average market value.

You are right, even one of the members on this forum made a topic about Korean exchange and showed a bot to make a profit out of Arbitrage trading. And when I checked the difference between the price of BTC on Binance and on the Korean Exchange, there was a huge difference. But the transaction fees and the tax were also high that there remained lesser profit.

Arbitrage trading is not so profitable if we are doing it in the same country's exchange, we should find the best exchange with better profits and also with better liquidity. Not to mention, you should have a huge amount of capital too. To start this trading. Because you can not make a profit with a lesser profit.

I did not get your point of exchange also uses bots to sync on the market price. If that's the case then why there are price differences?

[JunaidAzizi]

Arbitrage is the strategy of taking advantage of price differences in different markets for the same asset. arbitrage is purchasing an asset in a market where the price is lower and simultaneously selling the asset in a market where the asset’s price is higher.

Well, I am not going to recommend this to the beginner ever. You just write it easily and say that arbitrage strategy is easy but no it is not that much easy as you present. It's a very risky strategy because the crypto market is too volatile and the price can change very quickly what if you have not completed your trade yet and prices go down? obviously, you will take a loss and you are not coming to take a loss but instead want profits. This strategy requires very skills and technical knowledge and the beginners do not know those skills so how do you recommend this to the newbie? If they spend some time in crypto and gain some experience then maybe I will think to recommend this. Also, it takes time and monitory to look every time to the screen and note the movement of every currency. Instaed of these headaches I recommend simply investing your money in Bitcoin or alt and holding it for some time and I am sure that this will give more profits then arbitrage.

[rhomelmabini]

I think arbitrage these days got seldom of a price difference and if you ever did it's just the fees that will eat most of it. Unless you're using a super efficient bot that will utilize both the search opportunities for an arbitrage and the handling of the fees, I don't think it will be profitable enough to venture here as a beginner.

[Bobrox]

Actually arbitrage is most promising to earn profit faster than spot trading or future trading, different price with some coin from one exchange with another exchange as advantage how to earn profit with arbitrage. But its not easy when trying with arbitrage beside have checked with how much buy order volume and enough with our fund for arbitrage or not.
I have experienced with arbitrage and usually interested arbitrage with BSC Scan coin network with lower fees transaction have advantage with sending process faster than other network such as Polygon or Ethereum. Seems right now not easy to earn profit trough arbitrage, many time when listing on exchange have the same price and some new coins not open yet with deposit or withdrawing and make us difficult to sell on other exchange market who has higher price.

[michellee]

It looks easy but not as we imagine. I once got stuck during the coin transfer process, which made it late for the coins to enter another exchange and I suffered quite a loss. After several attempts at arbitrage trading, I decided not to continue with it anymore and stick with one or two exchanges and trade as usual.

What is difficult is finding coins that have good movements because it only happens to one or a few coins. Meanwhile, we must also pay attention and calculate how long the transfer process takes to complete. And look for information about how long the confirmation takes to complete so we can execute it immediately after arriving at the exchange we want.

But arbitrage trading can provide big profits if we find the right coin. Often prices on one exchange are higher than on another. And that makes greed try to tempt us to try it. So you should be careful if you want to try arbitrage trading.

[Lakai01]

-snip-
What is difficult is finding coins that have good movements because it only happens to one or a few coins. Meanwhile, we must also pay attention and calculate how long the transfer process takes to complete. And look for information about how long the confirmation takes to complete so we can execute it immediately after arriving at the exchange we want.

There are a few ways to mitigate the problems you listed. For example, you can hold a certain amount of USDT on several exchanges and use it to buy "undervalued" coins. As soon as their price level has adjusted to the overall market, you sell them again.

But of course this is not a classic arbitrage which the OP addresses here. Classic Arbitrage is highly automated and the best and fastest bot wins. There is almost no chance zo gain any profit if you trade manually.

[mk4]

Making money off arbitrage is definitely a viable method, but take note that I'm pretty sure doing it manually isn't. The arbitrageurs that are actually successful with their operations are using their own custom-made bots. You'll just very likely to get front-ran if you're going to do things manually.

[FatFork]

-snip-
What is difficult is finding coins that have good movements because it only happens to one or a few coins. Meanwhile, we must also pay attention and calculate how long the transfer process takes to complete. And look for information about how long the confirmation takes to complete so we can execute it immediately after arriving at the exchange we want.

There are a few ways to mitigate the problems you listed. For example, you can hold a certain amount of USDT on several exchanges and use it to buy "undervalued" coins. As soon as their price level has adjusted to the overall market, you sell them again.

But of course this is not a classic arbitrage which the OP addresses here. Classic Arbitrage is highly automated and the best and fastest bot wins. There is almost no chance zo gain any profit if you trade manually.

You're absolutely right! Arbitrage nowadays is all about automation and speed. The competition among bots can be fierce, and in that race, the fastest one usually comes out on top. When it comes to manual trading in this kind of environment, the odds of making a profit are pretty slim. I assume, however, in markets where API access is limited or practically nonexistent, and with assets that have very low liquidity, manual arbitrage trading might still have a chance.

[taufik123]

You're absolutely right! Arbitrage nowadays is all about automation and speed. The competition among bots can be fierce, and in that race, the fastest one usually comes out on top. When it comes to manual trading in this kind of environment, the odds of making a profit are pretty slim. I assume, however, in markets where API access is limited or practically nonexistent, and with assets that have very low liquidity, manual arbitrage trading might still have a chance.

Moreover, now Bot Arbit is also equipped with AI assistance so that it is faster and smarter.
But until now I still haven't tried using bots for Arbit trading.

I usually only take advantage of some opportunities when the price difference is clear and I use DEX Pancake or other DEXs with the BSC network or other networks that have cheaper gas fees.

monitoring the price difference between the DEX and the market, if there is some favorable difference then I start execution.
Yes, but it is recommended that currently using Bots is the fastest and most efficient way.

[Beerwizzard]

_ $100 or more

100$ of deposit is definitely not enough for crypto arbitrage.

First of all, you gonna need to buy the access for a decent arbitrage bot because beside the price difference you also need to know the market depth just to know the amount or coins you can buy. It is hard to do this completely manually since the arbitrage situation can last only for 15-20 minutes.
You need to have enough deposit to cover the exchange withdrawal fees. With 100$ deposit  these fees will kill the entire profit.
And of course a decent arbitrage bot can easily cost over 1000$ for monthly subscription.

[cryptoaddictchie]

It is indeed profitable but you need to monitor and consider some factors like the fees of the exchange and if the difference on price is worth the shot. Sometime it could been just an error or glitch thats why theres a huge spread. Plus the withdrawal fees on cex are probablt higher compared to dex. If you noticed the variance on price is based on dex liquidity and cex trading volume so you need to be flexible on this.

[joniboini]

Moreover, now Bot Arbit is also equipped with AI assistance so that it is faster and smarter.
But until now I still haven't tried using bots for Arbit trading.

Is it a new tech? As far as I can remember, I've seen similar features years or months ago. Probably not as complicated as using a ChatGPT but it uses AI to some extent. What new bots are using advanced AI that you know of?

[GreatArkansas]

I don't think arbitrage trading is still profitable these days. But back in the day, a lot of people made good money by doing Arbitrage trading.
But take note that it's not easy money, some also lose money while doing Arbitrage trading.
I can say also these days, since we already have a lot of market, like these decentralized exchanges (DEX) on different chain network, these networks could be also good use when you are doing arbitrage trading.

[adaseb]

You won’t have many opportunities with arbitrage these days. Back when crypto was newer you could arb easily with a simple bot you coded and had accounts on different exchanges but now the times have changed.

Now there are multi million dollar trading firms and market makers which have smart programmers that do all this arb trading in milliseconds. Almost impossible to do this manually or with a simple bot.

[Bobrox]

I don't think arbitrage trading is still profitable these days. But back in the day, a lot of people made good money by doing Arbitrage trading.
But take note that it's not easy money, some also lose money while doing Arbitrage trading.
I can say also these days, since we already have a lot of market, like these decentralized exchanges (DEX) on different chain network, these networks could be also good use when you are doing arbitrage trading.

Right, last two or three years ago many new coins list first on dapp exchange and few days later listing on CEX, its easy for us manage profitable trough arbitrage buy on dapp and later sell on CEX exchange who first time listing have difference price more than 10%. But right now most difficult to find with some new coins have difference price between dapp and CEX exchange and more have the same price when listing on CEX exchange.
Usually we can manage or consistent to earn profit with capital $100 but right now arbitrage needed above $1000 and possibility to earn profit under $20, not easy to find difference coins price right now in dapp and CEX exchange actually some coins when first time listing on CEX exchange not opening deposit yet.