Arbitrage Trading Strategy: Profiting from Price Gaps
The Arbitrage Trading Strategy involves buying a cryptocurrency on one exchange at a lower price and simultaneously selling it on another where it’s priced higher—pocketing the difference as profit. This strategy exploits inefficiencies in price across markets, often driven by latency, liquidity, or regional demand.
Popular types include spatial arbitrage (between exchanges), triangular arbitrage (using three trading pairs), and statistical arbitrage (based on predictive models).
In the fast-moving crypto world, where prices vary by the second, arbitrage opportunities are frequent—but short-lived. Traders must act fast, monitor fees, and automate execution with bots to stay competitive.
Though low-risk in theory, arbitrage demands speed, precision, and deep market access. Perfect for analytical minds and high-frequency setups.
