#ArbitrageTradingStrategy

Arbitrage trading involves simultaneously buying and selling an asset in different markets to profit from a temporary price discrepancy. The core idea is to exploit market inefficiencies where the same asset is priced differently on two or more exchanges.

For example, if Bitcoin is trading at $60,000 on Exchange A and $60,050 on Exchange B, an arbitrageur would buy Bitcoin on Exchange A and immediately sell it on Exchange B, locking in a $50 profit per Bitcoin (minus transaction fees).

Speed is crucial in arbitrage, as these price differences are often fleeting and quickly corrected by market forces or high-frequency trading algorithms. While considered relatively low-risk, potential challenges include execution delays, liquidity issues, and transaction costs which can erode profits. It's less common for individual retail traders due to the need for sophisticated tools and rapid execution.