💱 Arbitrage Trading Strategy: Key Points
Objective: Profit from price differences of the same asset on different exchanges or markets.
Core Idea: Buy low on one platform, sell high on another — simultaneously.
🔄 Types of Arbitrage in Crypto:
1. Spatial Arbitrage (Cross-Exchange)
Buy BTC at $29,800 on Exchange A
Sell BTC at $30,000 on Exchange B
Profit: $200 per BTC (minus fees)
2. Triangular Arbitrage (Same Exchange)
Exploit price differences between three pairs (e.g., BTC/USDT, ETH/BTC, ETH/USDT)
Convert between assets to loop back to the original, pocketing the spread
3. Decentralized Arbitrage
Use price mismatches between DEXs (e.g., Uniswap vs. PancakeSwap)
🧠 Key Requirements:
Speed: Must act quickly — arbitrage windows are brief
Low Fees: Profits depend heavily on fee structure
Automation: Most arbitrage is done via bots or algorithms
Capital: You may need funds on multiple platforms at once
⚠️ Risks:
Slippage: Price moves before both trades execute
Withdrawal Delays: Crypto transfer times can erase profit opportunity
Regulatory & KYC Limits: Not all exchanges allow fast or large transfers
✅ Best For:
Traders with strong technical setups
Those comfortable with bots and API integration
People with capital spread across multiple exchanges
