#ArbitrageTradingStrategy
A complete guide on arbitrage trading strategy, particularly adapted for cryptocurrencies (but also applicable to stocks, forex, etc.).
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đ What is arbitrage trading?
Arbitrage involves buying an asset at a low price on one market and instantly selling it at a higher price on another market, taking advantage of price discrepancies (spread).
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đĄ Simple example
BTC is selling for 29,850.$ on Binance
BTC is selling for 30,000.$ on Coinbase
âĄïž Buy on Binance â Sell on Coinbase = 150.$ profit per BTC (excluding fees)
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đ Types of arbitrage strategies (crypto & global)
Type of arbitrage Description
Inter-exchange Between two different platforms (e.g., Binance vs Kraken)
Intra-exchange On the same platform, between two pairs (e.g., BTC/USDT vs BTC/BUSD)
Triangular Exploits discrepancies between 3 pairs (e.g., ETH â BTC â USDT â ETH)
Futures arbitrage Exploits differences between spot and futures contracts
Spatial (geographical) Price discrepancies between countries (e.g., Korea/Japan arbitrage)
DeFi / On-chain Arbitrage on DEX (e.g., Uniswap vs Curve), often via bots (Flash Loans)
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đ Ideal conditions
High volatility â creates price discrepancies
High liquidity â fast execution
Low transaction fees
Quick multi-platform access (API or bots)
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đ§ Useful tools and platforms
Tool / Platform Function
Binance, Kraken, OKX Exchanges with good volumes for arbitrage
CoinMarketCap Arbitrage Real-time view of price discrepancies
Trading bots (Hummingbot, 3Commas) Automate arbitrage
Exchange APIs Quick access to prices and automatic execution
Uniswap, 1inch, Paraswap DeFi arbitrage (requires script + gas fees)
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â ïž Risks to consider
Risk Detail
Network latency The price may change before execution
Withdrawal / network fees Reduce or eliminate profit
Slippage If low liquidity, actual price may shift
Fund freeze Withdrawal delay or KYC verification
