Topic: Experience in Arbitrage trading? - page 2. (Read 324 times)

Leverage and arbitrage are two very different things.

Arbitrage trading can certainly be profitable, but doing it manually is next to impossible. You are more likely to lose money than make any profit. There are whole networks of bots with various fiat and cryptocurrencies already loaded on to various exchanges, primed to take advantage of any arbitrage opportunities within seconds of them appearing. You can see this whenever there is a sudden large buy or sell order on a single exchange which creates a price difference between it and other exchanges. Immediately the bots kick in and the gap in price is closed within a minute or two. By the time you have even noticed the gap, it's probably too late.

To effectively arbitrage, not only do you need to have a bot doing it for you, you need to have significant starting capital. It isn't sufficient to make a trade on one exchange, withdraw your funds to another exchange, and make a second trade. The price differential will have disappeared by the time your withdrawal confirms. You need to have both bitcoin and another fiat or cryptocurrency (or preferably 3 or 4 different currencies) already loaded on to a number of exchanges. Storing so much money on exchanges obviously exposes you to a large risk in and of itself.

So sure, you can make gains with arbitrage, but it isn't risk free and you'll need bots to do it for you. If you set up the bot wrong, one wrong trade could wipe out not only your profits, but also your capital.

If anyone offers to use arbitrage to make money for you if you send them an initial "investment", be aware it is almost certainly a scam.

Thanks. The link was very helpful. I'm not new to trading but never traded with leverage. It is interesting though.

You can read up the basics or main idea about leveraging here: https://www.finder.com/beginners-guide-to-leverage-trading-on-bitmex
If you are just total new with trading then its better not to risk up or tend to dive directly with leverage yet you would just simply burn out some money on it.
How it works? Then try to read up the link i gave and about the question on having gains,yes it can give out big gains if the market movement turns out into your favor but if not then your account will totally be blown.

I recently found out about this form of trading, but never tried it. Can anyone with experience give me some hints? I mean is this algorithm they use successful? And is it true about having big gains?