Does anyone here play with crypto arbitrage ?? Can you recommend any useful tools or bots
Arbitration is a very risky business. Before you start playing with arbitration, remember these few tips. The transaction may take some time to verify, cryptocurrency prices may change during the transfer. The verification process can be awkward, especially if you are trading large amounts of cryptocurrencies. Exchange fees may be too high and ultimately may not bring you any profit. In order to make a profit, you need to make big trades on both exchanges. You should carefully check the exchanges you are trading on, very often exchanges with attractive prices have trust issues and are unable to satisfy their customers. The bots recommended by the community Bitsgap, Arbitrage.Expert and Gimmer.
In general, cryptocurrency arbitrage begins when you buy a cryptocurrency on one of the exchanges. Before the purchase, the risk is basically limited only to the costs of preparing such a transaction, that is, for example, sending the funds to a given exchange. These will not be large costs, but you should know that they can also occur.
From the moment of purchase, all activities basically come down to the same thing - selling the purchased cryptocurrencies at a higher price. Along the way, several events can occur that will make this impossible or much more difficult.
The first problem with typical arbitrage is the time to transfer funds from one exchange to another. Normally, the operation itself should take from a few to several dozen minutes. After this time, it may turn out that the price on the target exchange has already fallen, and the whole opportunity is already outdated. The time to transfer a cryptocurrency consists of three stages:
"Clicking" the transfer order and confirming it - to do this, you need to check the deposit address on the destination exchange. This involves logging into it and often a two-step authentication. Then you have to enter all the data and usually confirm the withdrawal by clicking on the link sent by email.
Waiting for the transfer to be approved by the source exchange - this should not take more than a few minutes. There can sometimes be downtime at this stage, especially when multiple users suddenly want to transfer the same cryptocurrency.
Cryptocurrency transfer time over the network - each exchange requires a certain number of transaction confirmations from the network for a given cryptocurrency. So after a block with your transaction has occurred in the blockchain, you still have to wait for a certain number of more blocks to occur. You can track all this in the blockchain by having a transaction ID, which is usually provided by the source exchange after the transfer. The largest portion of cryptocurrencies are based on the ERC20 protocol, where it takes a few to several minutes to get the number of 30 confirmations.
Therefore, in most cases, the time of sending cryptocurrencies to another exchange is predictable. Each time you need to calculate the risk that once the funds are booked on the other exchange, the sales opportunity will no longer be valid.
In the simplest terms, it is a specially prepared computer program that analyzes data from the market faster than a human being, so as to be able to buy and sell a specific asset at the right time. Its purpose is to observe markets and react dynamically - according to a set of rules coded to it. However, automation alone cannot guarantee users profits - if it did, everyone would become a billionaire. In fact, making money with bots is not as easy as it is described - and traders who use them must have experience! Assuming that most people do not have this baggage, there is a high probability that they will fall into the trap of platforms offering easy money. However, it is important to realize that bots are only a tool that can improve trading and decision making speed, not a golden ticket to guaranteed income.
A bot can automate cryptocurrency trading, but here strategy is also important. Experienced traders, sharing their observations, more than once stressed that the "set it and forget it" rule does not work here. What is more, there are many types of bots and each of them is programmed for different purposes.
Many traders say that the chances of making money using someone else's software are really low because someone who builds an effective bot will not be willing to share it with others.
To sum up, a beginner who has no idea how the market works will not be able to make much money in this field.