#ArbitrageTradingStrategy

🔄 ARBITRAGE CORE

Definition:

→ Profit from price differences of the same asset in different markets (e.g., BTC on Binance $120k vs Kraken $120.3k).

Key Types:

✅ Spatial: Gap between exchanges (e.g., ETH, Forex).

✅ Triangular: 3 correlated pairs (e.g., EUR/USD → USD/JPY → EUR/JPY).

✅ Statistical: Quant models for correlated assets (e.g., Gold-Silver).

⚡ ESSENTIAL CONDITIONS

1. Minimum viable spread: >0.5% after fees (e.g., $100k operation = $500 profit).

2. Ultra-low latency: Execution in <50ms (robots/algorithms).

3. Guaranteed liquidity: Daily volumes >$10M in the pairs.

⚠️ DEADLY TRAPS

❗ Slippage: Price changes during execution (solve with VWAP).

❗ Hidden fees: Withdraw/network fees (e.g., ETH gas > spread).

❗ Regulation: Some countries prohibit arbitrage (e.g., India, Nigeria).

✅ LIGHTNING CHECKLIST

▢ Spread > total costs (fees + slippage)?

▢ Sufficient liquidity on BOTH sides?

▢ Direct connection to APIs (not via browser)?

▢ Exit plan for failure (automatic stop)?

> "Arbitrage is a race of speed: whoever executes first with the lowest cost wins." — Golden rule