The most common question I get asked is ‘how do you make money from arbitrage’, this is especially important in market crashes or in periods of high volatility as this is where the real money can be made.
Arbitrage is very easy, but you need to be alert, have multiple tabs open, as you will see in my pics below, and use something other than BTC to send your funds between exchanges, or your window of opportunity could close.
In the pictures below you will see and arbitrage opportunity for LRC. Minutes before this there was an opportunity to make 20% gains, but the gap has closed a little now and I was busy making money
Here’s how it works:
You will see I am trading LRC as the code is circled here on HiTBTC. The price circle is the sellers price, meaning that’s what I need to pay to acquire it. I use ETH for this pair as its quicker to send between exchanges.
So, after I have bought my allotment I then transfer the funds to the Etherdelta account.
Here I can sell it for about 9% higher than I bought it at. You can repeat the cycle until the window closes. I actually find sometimes the window reverses and it becomes cheaper on the one I was selling and I can then sell back to where I was buying. DON’T transfer between exchanges using BTC, its hopelessly slow and not good for traders. Even if you need to transfer in BTC pairs, pay the fee to swap it to ETH and back at the other end, time is money.
Pro Tip - Go to coinmarketcap.com and look at the markets to see the best arb opportunities. However, if a new exchange has been listed, that’s where the real opportunity lies as sometimes coinmarketcap takes a few days to update.
Happy trading and don’t forget to subscribe to the Bitcoin Benny YouTube channel for more tips and a chance to win $1000 worth of crypto