#ArbitrageTradingStrategy
🔁 Arbitrage Trading Strategy: Explained
🧩 Basic Types of Crypto Arbitrage
1. Spatial Arbitrage (Inter-Exchange)
Buy low on Exchange A, sell high on Exchange B.
Example: BTC is $120,000 on Binance and $121,000 on Coinbase. Buy on Binance, transfer, and sell on Coinbase.
2. Triangular Arbitrage (Intra-Exchange)
Exploits price differences between three pairs on a single exchange.
Example:
2. ETH → USDT
3. USDT → BTC
If the resulting BTC is more than you started with, it’s profitable.
3. Statistical Arbitrage
Uses models to predict temporary price divergence.
Example: Machine learning or regression models signal a mismatch between SOL/USDT on different platforms.
4. Decentralized Arbitrage (DEX-CEX Arbitrage)
Uses price spreads between centralized exchanges (CEX) like Binance and decentralized exchanges (DEX) like Uniswap.
Often done using bots due to gas fees and transaction speed.
5. Funding Rate Arbitrage (Perpetual Futures)
Exploits the funding fees paid by long or short traders on futures markets.
Go long spot and short perpetual when funding is high (or vice versa).
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⚙️ How to Execute Arbitrage Strategy
✅ Tools & Platforms:
Trackers: CoinMarketCap arbitrage tool, Coinglass, CoinGecko
Bots:
Hummingbot – open-source
Bitsgap, Arbismart, Coinrule – UI-based platforms
APIs: For high-frequency strategies (e.g., Binance API, KuCoin API)
