Arbitrage (how it works)

[BullRunBit 2773]

Explanation

Simple explantation of arbitrage in cryptocurrency trading is when you buy some coin/token for some price and sell same coin/token on other exchange for higher price.

Of course there are some things on which you must to pay attention before you try to make arbitrage, I will write about that below.

 

Example

On exchange A buy price of coin/token is 3.50$ and on B exchange sell price of same coin/token is 4.00$.

A exchange you buy with 100$ on buy price 3.50$ which is =350$ total in that coin/token.

B exchange you sell your coins/tokens on sell price 4.00$ which is =400$ total, which means that your profit is (400-350) 50$.

Simpler, A buy 350$ B sell 400$ profit 50$.

 

Another example, A exchange buy price 30sat and on B exchange sell price of that coin/token is 35sat.

A exchange you buy with 0.01 BTC on buy price 30sat which is =33.400 X coin/token.

B exchange you sell your X coins/tokens on sell price 35sat which is =0.01169 BTC total, which means that your profit is (0.01169-0.01) 0.001169 BTC.

Simpler, A buy 0.01 BTC sell 33.400 X profit 0.001169 BTC.

 

Calculation

Above I write calculation without to adding any fees which is really important for arbitrage.

When you looking for some coin/token with which you want to make arbitrage you must to count/calculation on few things.

1/ Trading fees, for example some exchanges have fixed fees like for example Yobit buy/sell is same 0.2% but on some exchanges it's different for example 0.1% buy and 0.2% sell.

2/ Withdraw fees, this is too really important because some coins/tokens have high fee for withdraw and that can not be good for arbitrage but some other coins/tokens have really low fee which is good for arbitrage.

3/ Market, if you see that price is not stable (24h) that can not be good for arbitrage because in meantime (when you transfer coins/tokens) maybe price change and you loss your profit.

 

Conclusion

Before start with arbitrage it would be better to research all facts about arbitrage.

For example there are few different type of arbitrage, trading, betting, maybe some other too but it's different.

In cryptocurrency arbitrage you must to count on fees which make your profit lower and if you dont count on that maybe you will make mistake and dont get any profit.

Or if you use some not popular exchange maybe your coins will "stuck".

Point is, arbitrage is not easy and you must to count on all thing which I mentioned above and to be sure that you can make profit.

 

P.S. I did not know where to share this topic (exchange or trading) and I decide to share this in Tutorial section.

 

Edit part (Swap Arbitrage):

I make some good trades/arbitrage with swap websites, which (surprising) was very easier than with regural arbitrage (exchange to exchange).

There are low fees and plus it's all automatic which is really good/easy for use.

Example:

I buy on A swap website X token and on B swap website it's shows automatic and I sell there for higher price and make profit.

Things on which you must to pay attention is that token have liquidity and price change but that maybe can not be a problem because it's automatic.

Like I write above I will write for this too, always research before you make arbitrage and maybe sometimes dont give you profit and it would be good to not risk to much coins/tokens.

Happy arbitrage! 

Edited October 24, 2020 by BullRunBit
Swap Arbitrage

[Ridam 7455]

Arbitrage seems to be less difficult trading strategy for getting profit. If we take in simple we buy assest in a exchange in low price and sell it on exchange with high price. As I'm trying to gather capital for arbitrage. How much do you suggest a arbitrage Beginners to start with at starting?

[PrinceShoto 23]

Is there some services to automate arbitrage? 

[Dorjoy12 8962]

14 hours ago, Ridam said:

Arbitrage seems to be less difficult trading strategy for getting profit. If we take in simple we buy assest in a exchange in low price and sell it on exchange with high price. As I'm trying to gather capital for arbitrage. How much do you suggest a arbitrage Beginners to start with at starting?

@Ridam its totally depend on your experience plus capital.. If you want to get good capital then you need to have the minimum investment.. But 100 usd profit is perfect from arbitrage trading so you can calculated the capital plus profit easily.. Also be careful about those exchange site where you want to do this arbitrage trading as you know many exchange site stole your deposit and then we have nothing to do..                

[Projectcrypto 4382]

Arbitrage trading is very profitable and at thesame time itniw also dangerous especially when you don't have good background about Cryptocurrency trading, in order to make good profit in arbitrage trading we have to make sure we buy when price are low after which we will look into another exchanger where the value of the coins in a bit higher so that we can sell to earn some profit and that means we have to be smartnand fast because Volatility is nature of Cryptocurrency.

[Ridam 7455]

4 hours ago, Dorjoy12 said:

@Ridam its totally depend on your experience plus capital.. If you want to get good capital then you need to have the minimum investment.. But 100 usd profit is perfect from arbitrage trading so you can calculated the capital plus profit easily.. Also be careful about those exchange site where you want to do this arbitrage trading as you know many exchange site stole your deposit and then we have nothing to do..                

@Dorjoy12 I have taken ideas about Arbitrage from @Calvinpriva too. And from this topic, his review and your suggestions, I will start arbitrage. I'm believing the talk token trade will allow me to gather good capital and dive into the Arbitrage. Upto then I'm just keeping my eyes on different Pairs on Different exchanges.

[BullRunBit 2773]

18 hours ago, Ridam said:

Arbitrage seems to be less difficult trading strategy for getting profit. If we take in simple we buy assest in a exchange in low price and sell it on exchange with high price. As I'm trying to gather capital for arbitrage. How much do you suggest a arbitrage Beginners to start with at starting?

I can agree with @Dorjoy12 that depend on your experience and it would be good that you research before you start. But about profit 100$ you need big amount and that is risky for sure, maybe lower amount not bad.

42 minutes ago, Ridam said:

@Dorjoy12 I have taken ideas about Arbitrage from @Calvinpriva too. And from this topic, his review and your suggestions, I will start arbitrage. I'm believing the talk token trade will allow me to gather good capital and dive into the Arbitrage. Upto then I'm just keeping my eyes on different Pairs on Different exchanges.

Good choice, before you start try to learn more about arbitrage. And I hope that I write some facts which can help you to understand well how it works. 

 

P.S. I will edit topic soon to add some more facts. 

[Dark Shadow 295]

Great topic @BullRunBit. It is very informative. I can not believe that I have never heard the term 'arbitrage'. I have heard about buying and selling coins on different exchanges but I did not know it was called 'arbitrage'. At first I thought it would be too much work for just a little profit but now that you have explained it I am starting to think it is a good idea and you could earn a lot through it. I will be sure to try it soon👍

[Calvinpriva 17296]

1 hour ago, Ridam said:

I have taken ideas about Arbitrage from @Calvinpriva too. And from this topic, his review and your suggestions, I will start arbitrage. I'm believing the talk token trade will allow me to gather good capital and dive into the Arbitrage. Upto then I'm just keeping my eyes on different Pairs on Different exchanges.

@Ridam I'm glad to hear this ☺️. Arbitrage is really good and easy if you'll focus to check good pairs on different exchanges, yesterday there was a difference of around $1.2 if am not wrong, in LTC between Binance and Yobit. So if you'll be an active trader and you have capital, there are many chances to earn profit from arbitrage.

[Dorjoy12 8962]

1 hour ago, Ridam said:

have taken ideas about Arbitrage from @Calvinpriva too.

@Ridam  you choice the right person in this case as @Calvinpriva is an arbitrage trader so without any doubt he can help you the most about it.. As far as i know whenever we do arbitrage trading he get profit around 100 usd easily though its risky too for him.. 

 

1 hour ago, BullRunBit said:

But about profit 100$ you need big amount and that is risky for sure, maybe lower amount not bad.

@BullRunBit        actually trading for them who has enough capital to cover their lose.. There has no chances that you will be success in every trading...  And those member have enough capital to earn 100 usd profit from per arbitrage trading i hope....            

[Ridam 7455]

Quote

As far as i know whenever we do arbitrage trading he get profit around 100 usd easily though its risky too for him.. 

@Dorjoy12 I don't think we will have such big profit. For that scenario we need to have very big capital as @Calvinpriva already told there was only 1.5$ difference in yobit and Binanace. 

I would like to hear from Calvinpriva about your thoughts as he has enough experience in arbitrage.

[Calvinpriva 17296]

3 hours ago, Ridam said:

@Dorjoy12 I don't think we will have such big profit. For that scenario we need to have very big capital as @Calvinpriva already told there was only 1.5$ difference in yobit and Binanace. 

I would like to hear from Calvinpriva about your thoughts as he has enough experience in arbitrage.

You are right @Ridam $100 is big profit and you'll need to have a big capital to earn that profit. About yesterday, you would have to buy at least 70 LTC to earn $100 profit, which costs more than $3500 !!!!!! So there is a big profit just as @Dorjoy12 said, but many people fail because of no capital.

[veimaralex 83]

Wow i need to research more about arbitrage, because sounds interesting also is a good way to earn money or invest on it due the boom of cryptos, defis and other technologies.

[Calvinpriva 17296]

1 hour ago, eliottalderosn said:

@Calvinpriva

but if they try with smaller-value coins I guess they might overcome that problem right?

I mean no one started big right away when he got into trading

for example you buy for 50$ and then sell for 55$ which means you get 5$ as a profit.

If you keep repeating this process given you don't lose on any trade you start reaching new levels until you have 500$

It is not easy I know but most people don't have that big capital to trade with high-value currencies like LTC for example. This is how I see it

@eliottalderosn Absolutely right, that's why every time when i teach some members arbitrage, i will recommend xrp and waves in coin list. There are many cheaper coins that can give you profit with low capital.

[Dorjoy12 8962]

9 hours ago, Calvinpriva said:

So there is a big profit just as @Dorjoy12 said, but many people fail because of no capital

@Calvinpriva in some situation of crypto we need knowledge and experience but in another situation we all need capital always 😆.. You can take look on yobit mining feature where knowledge has no power  except money.. Again in binance margin trading they will rent you money according to your capital in binance balance... If you have 100 usd then they will give you 400 usd as borrow and after done trading they will keep it back with Commission.. Every where need capital to success..