#ArbitrageTradingStrategy 🔁 What Is Arbitrage Trading?

It’s the practice of buying an asset on one exchange at a lower price and simultaneously selling it on another at a higher price to pocket the difference.

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📊 Common Arbitrage Strategies:

1. Spatial Arbitrage

Exploit price differences on different exchanges (e.g., Binance vs. Coinbase).

Often automated with bots due to speed requirements.

2. Triangular Arbitrage

Happens within one exchange.

Involves trading between three assets to exploit price imbalances.

Example: BTC → ETH → USDT → BTC.

3. Decentralized Arbitrage

Across DEXs like Uniswap vs. Sushiswap.

Often uses flash loans in DeFi to execute trades instantly.

4. Statistical Arbitrage

Uses quantitative models and mean reversion strategies.

Requires coding and backtesting.