What is the Arbitrage trading strategy?
Explanation of features and risks with examples
It simply means buying a cryptocurrency from a platform where the price is cheaper and selling it immediately on another platform where the price is higher — thus achieving an instant profit from the price difference.
Simple example:
BTC price on platform A = $112,000
BTC price on platform B = $113,200
If you buy from A and sell in B, you achieve a theoretical profit of $1,200 on each Bitcoin — without significant market risk (if the transaction is executed quickly).
Features of this strategy:
Almost instant profits. Does not rely on technical analysis or predictions.
And suitable for high liquidity markets.
Disadvantages and risks:
1. Transfer and withdrawal fees may wipe out profits.
2. Execution speed is very important – the market changes quickly.
3. Regulatory constraints – some platforms do not allow for quick money transfers.
4. Price slippage when executing large orders.
How to start?
Open accounts on more than one platform (such as Binance, OKX, KuCoin).
Use price comparison tools or dedicated arbitrage bots.
Make sure to account for all costs (withdrawal fees, transfer, trading).
Start with small amounts to test the strategy.
Conclusion:
The Arbitrage strategy is not new, but it is effective when executed smartly and quickly. In the cryptocurrency market, where prices differ from one platform to another within fractions of a second, it remains a unique tool for profiting from temporary price inefficiencies in the market.$BTC $ETH $BNB
