arbitrage trading Risks Arbitrage Trading Method in Cryptocurrency

[Agios 1763]

The term of "Arbitrage Trading" is very popular in Financial Trading, currently some people have applied the arbitrage method into cypto trading. I've not found a site that discusses arbitrage trading for cryptocurrency therefore I want to discuss and sharing about it in the CryptoTalk forum. The meaning crypto arbitrage trading is very simple, buy a crypto at an exchange then sell soonest  with higher price at other exchange, and we make profit with difference price between 2 exchange. we will be charged blockchain fees for sending and receiving crypto that should be deducted from our profit. Of course it's not easy like a peace of cake, we must think about what risks will occur if we use the crypto arbitrage trading method. 

[BitTyro 148]

Just my opinion, Crypto arbitrage trading has a greater risk than regular trading. For you to be able to take advantage of differing prices for the same asset, you need to be very fast in executing your buy and sell order. With cypto, you can't send your coins from one trading platform to another in an instant. By the time that your coins was transferred to another trading platform, the price could have been equal, a little over than the price you bought it, or worst, it could even be lower. You  risk paying withdrawal fees and the transactions fees by doing arbitrage.

One solution I see is that have an equal amount of coins/funds on Trading Platform A and Trading Platform B. Like for example, you bought $ 8,200 from trading platform A, and sell your coins  at $8,300 on trading platform B. This way, you avoid paying withdrawal and transaction fees. 

Edited October 14, 2019 by BitTyro

[iloveyobit 6599]

yep people just want to earn money only with any way they can find , the arbitrage is too risky and not profitable in most of time cause exchanges close the wallets

[williamz902 696]

There is a lot of research involved in arbitrage trading. For example, you need to know the BUYING price on one exchange and the SELLING price on another exchange. Sometimes Exchange B, where you want to sell might seem to have a higher price, but it doesn't because there is a difference between Exchange B's buying and selling price known as the spread. This spread is very important before you even attempt arbitrage. You also need to know what the withdrawal fees are on both exchanges - otherwise they might just eat into your entire profit. Further more, you need to check volume - are there actually any orders in the order books, or are you just going to transfer funds from one exchange and have them stuck on another exchange because no one is buying or selling?! The last thing to check - make sure the wallets for both exchanges are online and working! Otherwise you will end up with your coins stuck on one exchange and unable to send them anywhere.

[bean 515]

Arbitrage trading can be difficult to make money with, the difference between exchanges can be very small, you have to account for exchanges withdraw fees and trading fees, you will have to withdraw and trade two times before you can make a profit, so be sure to take everything into account.

[Agios 1763]

28 minutes ago, bichou1584 said:

I have done this process several times, all I do is to monitor prices in several different places the method is easy and simple but it is not without risks.  It depends on how quickly the process takes longer

That's right, it must be fast to trade crypto arbitrage, if a little slow the price will change. Thanks for sharing your experience. 
 

[nicolas1234789 2566]

The risk only stuck or loss in high price. You need stable connection ( network ) and big money to start. This method need speed because price and volume can change in second. Try to find manipulate trading group in telegram channel, they work together in one time to create wave on exchanges. Maybe they can help you as long you can quiet.

[Syedbesharat 5423]

On 10/14/2019 at 9:21 AM, Agios said:

The term of "Arbitrage Trading" is very popular in Financial Trading, currently some people have applied the arbitrage method into cypto trading. I've not found a site that discusses arbitrage trading for cryptocurrency therefore I want to discuss and sharing about it in the CryptoTalk forum. The meaning crypto arbitrage trading is very simple, buy a crypto at an exchange then sell soonest  with higher price at other exchange, and we make profit with difference price between 2 exchange. we will be charged blockchain fees for sending and receiving crypto that should be deducted from our profit. Of course it's not easy like a peace of cake, we must think about what risks will occur if we use the crypto arbitrage trading method. 

I do it twice during peak of BTC last Boom . You won't make much today, once btc goes above $10k  This 2020 .May be i can make it more  this time.

[Agios 1763]

8 hours ago, Syedbesharat said:

I do it twice during peak of BTC last Boom . You won't make much today, once btc goes above $10k  This 2020 .May be i can make it more  this time.

Well, I also hope that BTC can hit more than $ 10k in 2020, so that it will benefit us in the Arbitrage trading method or daily trading and investment. 

[Syedbesharat 5423]

14 hours ago, Agios said:

Well, I also hope that BTC can hit more than $ 10k in 2020, so that it will benefit us in the Arbitrage trading method or daily trading and investment. 

Yeah,that will make easy money.But i think we will see some spikes in few days before major bullish.I am collecting funds for it .So i can not miss this chance.

[Agios 1763]

7 hours ago, Syedbesharat said:

Yeah,that will make easy money.But i think we will see some spikes in few days before major bullish.I am collecting funds for it .So i can not miss this chance.

I hope so, a very good idea, to collect money, to take advantage of the price spike before the major bullish. Thanks bro.

[Nakamoto 279]

On 10/14/2019 at 11:21 AM, Agios said:

we must think about what risks will occur if we use the crypto arbitrage trading method.

The risk is when your coin is not delivered in time and the price in another exchange is dumped below your buy price.

[Agios 1763]

50 minutes ago, Nakamoto said:

The risk is when your coin is not delivered in time and the price in another exchange is dumped below your buy price.

Yeah you're right bro, lots of contrains like slow confirmation and frequent internet / wifi interruptions, making us lose money because prices have changed.

[Syedbesharat 5423]

4 hours ago, Nakamoto said:

The risk is when your coin is not delivered in time and the price in another exchange is dumped below your buy price.

Yeah,your opinion is right.Thats the reason it will not done on daily basis.This is a specific periodic time limited scenario where we see constant price upward trend.Therefore doing it in bullish period is better choice.

[Nakamoto 279]

19 hours ago, Agios said:

Yeah you're right bro, lots of contrains like slow confirmation and frequent internet / wifi interruptions, making us lose money because prices have changed.

A good strategy or plan will make your trading success. You must learn what is a possible alternative to make money transfer went smooth between exchange.

[Rudro88 371]

I don't really know some of the trading methods.  Then I continue trading.  If we get very good results from trading through the application of arbitrage arbitrage, then I think Arbitrage is used by everyone.  I will also use this method.

[Crypto123 0]

Yes, arbitrage is very profitable, but it needs a great speed because once it is discovered by exchanges, it immediately closes the withdrawal and deposit of the currency on which there is a difference in price with another exchange. So there will be a risk. Also, you should check the fees because some fees are very high.

[Apple 202]

Of course, we must eliminate the risk by taking all factors into account. We can use other coins to send funds to other exchanges that have lower fees and short transaction times. All of this must be planned before there is an opportunity to arbitrate.

[McCree 713]

38 minutes ago, ZeusBoy77 said:

In my opinion, arbitrage trading is good and can be done by anyone, but it has a greater risk than trading on a regular exchange, usually trading experts conduct arbitrage trading.

Arbitrage trading needs two exchanges to be successful. Some people even transact between more than two exchanges taking advantage of the discrepancies between them.

[febriyana 934]

Arbitrage trading is not popular strategy to use. Because that strategy have a lag when you doing transfer from one exchange to other exchange. That is sure because the coin itself. That coin is operated by blockchain, where to get confirmation transaction need some miner. When you transfer the coin to other exchanges, maybe can take some minutes or hour. That is bad when you doing it on the fast moving market.

[Whydoyoucare 1094]

This strategy is really complex and much more riskier than simple trading like day trading, so i think this is good if you already have enough experience and already explore a lot of ways how to earn profit in crypto.

[Shaza Ahmad 1682]

I suspect that arbitrage trading is very risky because If we send the assets, the transfer may delayed, and the price falls, we will be very disappointed, so whoever wants to trade in arbitrage should have capital on several platforms.

Edited February 9, 2020 by Shaza Ahmad
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[Jhadhasan 872]

It may be a matter of risk to your money. We cannot risk all of our money so that we can ultimately have a small profit. Trading in the basic way keeps us safe from risk.

[McCree 713]

On 2/9/2020 at 12:13 PM, Whydoyoucare said:

This strategy is really complex and much more riskier than simple trading like day trading, so i think this is good if you already have enough experience and already explore a lot of ways how to earn profit in crypto.

It's basically trading money on one exchange, withdrawing, depositing to another exchange and trading it back to the original currency. It can also be done in one day too if the exchanges withdraw and deposit fast enough.

[bliznec 22267]

Where there is a good delta for trading with cryptocurrencies, there is profit. Arbitrage also depends on how the trader takes the role of trading, and the delta helps in this.