12.08.2020
Arbitrage crypto trading

Arbitrage crypto trading: upgrading your trading to PRO level

Have you ever wondered what arbitrage trading in cryptocurrency is about? Let’s find out! Now that we’ve more or less covered all the basic concepts in our blog, we’re thrilled to let you know you’re moving to more advanced stuff (which happens to also be a lot more effective and fun). You’re ready. The Force inside you is strong. 

Just in case, we hope you’ve read this article about responsible trading first plus caught up on some slang and checked out cool new ways of surfing through dramatic price changes with the Elliott Waves Theory. 

Now you’re getting into the most interesting parts of trading such as the Dow Theory, index funds (coming soon), and arbitrage trading. A green recruit no more, you stand at the helm of your Destiny, ready to grasp exciting new ideas and discover paths less traveled and buried treasures. Beware! For in these parts there be monsters. 

Before we let you get on with the concept of arbitrage trading, we really ought to give you a warning about handling your business carefully. 

By now you know about using all the security you can, like 2FA, email operations withdrawal, watching out phishing attacks, and so on. But you also need to be very careful about the exchanges you deal with.

Arbitrage traders in crypto: what to watch out for

New ones are springing up every day, and we keep hearing more and more often about the ones getting prosecuted. We’ve read before breakfast about three exchanges going to court over misdemeanor just yesterday. 

Funnily enough, as dangers grow, the interest in privacy-enabled communication is increasing with Bitcoin’s price growing steadily, Telegram getting unblocked, and many more governments creating their governmental “cryptocurrencies”. 

Then you win

First, they laugh at you. Then they hate you. Then they fight you. Then they ignore you. Then you win. 

Feeling satisfied yet about having jumped on the crypto gravy train yet? You just wait. As freedoms grow, so do profits, prophets, profiles, and conmen profiles at police precincts. 

Meanwhile, it’s the concept of international spaces we wanted to talk to you about. 

Arbitrage strategies cryptocurrency across nations, time, and space 

By now you’re sufficiently confident about trading using classical strategies. But hey, who said you should only deal in one dimension?  What would happen if you found out that Bitcoin is substantially more expensive in Africa than in London? Somewhere, where something is urgently needed people tend to sell it for more. 

Arbitrage strategies cryptocurrency

The concept, known as premium trading, means that on other exchanges and in other countries crypto may be worth more or less than in others.  For example, Bitcoin may be worth 9500 here and 9800 somewhere in South Korea or Hong Kong. These systems are complex, but normally in countries where the government rules with an iron grip, people are willing to pay more for freedom. 

Arbitrage trading in crypto

What is arbitrage trading about? The easiest way of doing arbitrage trading in crypto is buying it where it’s cheap and selling it on another exchange geographically where it’s more expensive. There are also other types of arbitrage, some more complex like statistical arbitrage, and others more intuitive like finding a small exchange that mimics everything that happens on a large exchange one for one with a 30 second delay and taking advantage of being able to read the future.

One way or another, the idea of arbitrage is simple, captivating, and effective. 

Robots trading

Automated crypto arbitrage trading 

You know who’s uh-mazing at making deals in nanoseconds across thousands of miles? Exactly. Robots. Read this article about why humans come nowhere close to machines when it comes to making quick decisions. And when we say quick, we mean like “30 000 000 times faster” kind of quick. Arbitrage trading crypto bots

Choosing the right platform to do arbitrage on

There are many exchanges around the world with delicious and tempting offers. Some of them are a little too delicious. However, paying attention to security first and foremost is tremendously important. Major companies like BitFinex are going to court and a dozen exchanges getting hacked into only in the last year. Among the targeted and successfully taken down only in the last year are: 

Exchanges hacked
  1. Cryptopia
  2. Coinmama
  3. DragonEx
  4. Bithumb
  5. Binance
  6. GateHub
  7. Bitrue
  8. Bitpoint
  9. VinDAX
  10. Upbit. 

Already the second wave is upon us, blog.idex.io reports:

“May 31, 2020 – Coincheck

In an official statement, the Tokyo-based organization shared that attackers hijacked one of Coincheck’s domains to carry out spear-phishing attacks on customers.

Coincheck stated that certain personal information like names, registered addresses, birth dates, phone numbers, and ID Selfies was exposed in the incident. Digital assets, however, were not affected. 

In 2018, Coincheck lost $500 million in NEM coins after hackers compromised the exchange platform.

February 5, 2020 – Altsbit

According to Altsbit, hackers were responsible for the theft of a large number of coins. The exchange cannot compensate losses but intends to return untouched amounts as some percentage to users.”

We strongly suggest choosing Nominex as a base secure platform with its security license from the cybersecurity capital of the world, Estonia. 

But even more importantly, make sure you choose other platforms you’re doing arbitrage trading on with care. Reviews don’t lie (unless someone can find a good information deletion specialist, which is why we’re so fond of blockchain where information cannot be tampered with).

Reddit is a useful resource for unbiased feedback (and a heck of a lot of trolling). Find a trusted platform where honest reviews are gathered and make sure you choose a decent trading platform before you consider seriously arbitrage-trading. 

Why arbitrage-trade crypto? 

The crypto market is known for its volatility and price spikes and crashes. Unlike the regular market, where you can take your time, crypto is like an untamed stallion – it takes a real specialist to profit from supremely fast price movements but it’s also incomparably fun. 

While that can be stressful, there are also plenty of opportunities. To reduce your exposure to harmful elements, Nominex offers trading using a demo mode before you go out into the field so you can feel protected. We’ve got you covered. 

Before you go

Make sure you’re trading responsibly, 1) taking into account that day trading is famously stressful, 2) factoring in fees, withdrawal delays, and 3) paying attention to the laws and regulations in the country you’re doing arbitrage trading in. We want you to stay safe.

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