Reviewing ARBI - profitable and simple Triangular Arbitrage for the modern trader - the Why’s and the Why’s
Triangular arbitrage is a relatively risk-free trading methodology - frequently used by high frequency professional and institutional traders. ARBI is an impressive, well-built, cost-effective trading bot which tackles many the complex technical problems, allowing casual and non-professional retail traders to trade profitably using this strategy.
The principles behind triangular arbitrage are well known - market inefficiencies give the astute trader to chance to make profit by buying and selling connected triplets of currencies, for example: coin A->B, followed by coin B->C and finally by coin C->A. Properly executed, the difference in the buying and selling prices going around the loop should exceed the associated exchange fees, and result in a small net profit for the trader of typically up to one percent or so. Although individual profits per trade may be small, If the frequency of these trades is high enough, and they can be traded during the very short periods that they remain profitable, the cumulative effect of adding together lots of small profits will steadily grow the overall portfolio. Importantly, triangular arbitrage provides additional security by keeping the assets in the base coin(s) for most of the time (e.g. BTC, ETH, or a suitable stable coin). This means that the trader stays invested in the main store of value for most of the time, and should not suffer losses if particular alt coins decrease in value.
To operate triangular arbitrage efficiently requires that all three stages of the triangular loop should be completed very rapidly, usually in under a second. This can only be achieved by a fast and efficient automated trading bot that is able to both identify the opportunity, and to execute all three of the trades in a very fast way. ARBI has been well designed to make this possible, profitable, and accessible for the non-professional trader. An important aspect of ARBI is the very clever design of the bank system in which partially completed trades are stored, and then sold back to the base currency at a later time to secure a net profit. Such a system of cleverly integrated money management, coupled with the triangular arbitrage methodology is unique to this kind of trading bot.
Trading is essentially a zero-sum game - every trader making a profitable trade is balanced by another trader suffering a losing trade. So how can the trader tilt the odds in their favour to be on the winning side of the equation the majority of the time? Triangular arbitrage provides that very way to push the probabilities to your side. ARBI has been skillfully designed as a high frequency trading bot to seek out, and to trade the most profitable opportunities on a major exchanges such as Binance, Poloniex, OKEx, on average every 2 milliseconds. ARBI can do this for you 24 x 7, relentlessly seeking out profit while you focus your time onto other things, including enjoying the profits it has helped you achieve.
You will be trading against other traders who are all trying to beat you to the profitable arbitrage trades, and it is true to say that in triangular arbitrage, speed is of the essence. Although you can trade with ARBI from your own computer based almost anywhere, to get the very best results you should use a virtual private server (VPS) located close to the exchange you are trading on (so for Binance, a Tokyo based server, or for OKEx, a Hong Kong based VPS accessing the Alibaba network or a Cloudfare access point for Poloniex should give best performance). These are relatively inexpensive to set up and operate, and should more than pay back the investment through the increased profitability that is achieved by faster trading and beating your fellow traders to the opportunity.
You should not expect to start with the very best settings that are guaranteed to produce the very best results the first time that you turn ARBI on. The cryptocurrency markets are constantly and dynamically changing, oscillating between highs and lows, and subject to the high volatility characteristic of cryptocurrency trading. There simply is is no ‘magic’ setting, or strategy that turns ARBI into a ‘money printing system’ under all circumstances - this is quite simply a fantasy. You will however be guided towards sensible starting configurations, and it is then up to you to use your trading skills and experience to fine tune these to enhance your profitability under different market trends and conditions. This is exactly how all of the really successful ARBI traders have learnt, so that they can build their own edge to tune ARBI for the prevailing market conditions to maximise profits.
There is a vibrant Telegram channel associated with ARBI, which is closed to the outside world, but where users can ask questions about strategies and settings amongst their fellow traders. These are helpfully and rapidly answered both by ARBI’s creator, and from the community of other ARBI users. To be quite frank, it is highly unlikely that the most successful ARBI users are going to publicly publish their most profitable settings at any given time, because you would then be directly competing with them - but what you will find by asking well-posed questions is a Community who have probably been through the same journey that you are embarking on, and who I’m sure based on my experience, will helpfully point you in the right direction - just as others probably helped them when they were at a similar stage. And of course, you might always try to strike up a direct conversation with the more successful traders.
The creator of ARBI remains very active on the associated Telegram channel, and is very approachable for engaging in discussion on the public channels, and also by personal messaging (PM) - and when you ask sensible and well-posed questions, they will be rapidly responded to with incisive and helpful answers. It is always nice to see that software creators are directly approachable in this way, and to have prepared clear documentation in a Technical Manual which is available on a dedicated website.
To summarise, trading with ARBI should naturally form one strand of your overall trading activity, fitting well alongside other strategies you might operate such as longer-term swing and position trading. As it is a relatively risk-free, balanced, and turn-key way to slowly increase your overall portfolio, it is difficult to find arguments as to why you would not want to include ARBI as a central part of your trading activities. The advanced technology, slick design and support of ARBI clearly make it the go-to bot to profitably and cost-effectively trade triangular arbitrage opportunities in 2019. Go ARBI ......