what is the ideal price difference that people use to arbitrage bitcoin?

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Quote from: BrewMaster on June 19, 2021, 10:06:32 AM

i have used arbitrage trading strategy myself but for altcoins only and whenever their price had a big difference. but i am curious what percentage is the ideal price different for people who use this strategy for bitcoin trading.

for example looking at Binance the price has been about $300 to $350 below the market price and that is about 0.83% to 1% difference which looks good enough for bitcoin with a highly liquid market to me.

the point i need to saw only buy or sell order amount beside price difference in exchanges. I am just worry if i am start arbitrage but while my token added in exchanges, buy already gone and we loss in transaction fee or even we got losses. Personally this is the main point to view before i am look how much the price difference. For me atleast i should i get 6% to 10% nett after cut transfer fee and other cost.

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I don't think arbitrage trading strategy is a good idea for Bitcoin, the difference in price between platforms may seem a bit tempting but there is a big problem that prevents arbitrage from happening easily. In this case, to buy 1 BTC, that is, you must pay 35,000$ to eventually get a profit of 300$. Also, don't forget to deposit large amounts that can cause a problem on some platforms and be required to verify KYC and this is what many avoid. Using altcoin arbitrage is much better and more profitable.

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Quote from: tulusikhlas on June 28, 2021, 10:15:25 AM

as many have commented that bitcoin arbitrage will not be profitable because you will be charged multiple fees, so it cannot cover the transferred capital.
Likewise, with the most profitable altcoin, it may only be 1% to 2%, considering that it depends on the condition of the altcoin trading volume and the spike that is generated in a short period of time. However, if you are doing arbitrage when conditions are hunting for high prices in one particular market, then you experience a delivery jam or wait for several confirmations, it will be very risky.

I don't get how withdrawal fees will hinder arbitrage trading. I will explain how it can be done without actually withdrawing and depositing BTC.

1- Imagine you see BTC being sold at $35k at one exchange. (exchange A)
2- You see people buying BTC at 36k at another exchange. (exchange B)

Now what you need to do is really simple. You will borrow 1 BTC from exchange A at $35k and then you will short sell 1 BTC at exchange B at $36k. Now once both the trades are completed, you just need to deposit 1 BTC back to exchange B which you can do with ease since you have that in exchange A. Did I miss something here guys?

tulusikhlas

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as many have commented that bitcoin arbitrage will not be profitable because you will be charged multiple fees, so it cannot cover the transferred capital.
Likewise, with the most profitable altcoin, it may only be 1% to 2%, considering that it depends on the condition of the altcoin trading volume and the spike that is generated in a short period of time. However, if you are doing arbitrage when conditions are hunting for high prices in one particular market, then you experience a delivery jam or wait for several confirmations, it will be very risky.

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Quote from: BrewMaster on June 24, 2021, 11:13:36 AM

if you see such big differences the first thing you should think about is whether there is anything wrong with that platform or the coin itself that has reached such a big percentage difference without anybody else doing anything about it.
it usually is the exchange having problems with deposits or the coin having problems like the shitcoins that get 51% attacked.

1.3 to 1.7% is more common than 3% to 4% because gamblers use 100x or 50x leverages more common than 25x leverage.

The leverage market kills gamblers and price will change with correspondent leverages. I don't see what's wrong with exchange as you said. I could misunderstand your opinion.

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Quote from: tbct_mt2 on June 23, 2021, 08:41:24 AM

You can use 3% to 4% as well but you will have less chance to see and catch them. If you can catch the 1.3% - 1.7% with three more times than 3% to 4%, why do you not enjoy 1.3% to 1.7%?

if you see such big differences the first thing you should think about is whether there is anything wrong with that platform or the coin itself that has reached such a big percentage difference without anybody else doing anything about it.
it usually is the exchange having problems with deposits or the coin having problems like the shitcoins that get 51% attacked.

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Quote from: TheGreatPython on June 21, 2021, 01:22:02 PM

Do you have any explanation to justify your statement of 1.3% yo 1.7% because I believe this seems like too narrow differences and market may get converge before you try to catch the price gaps.

Because you will have more probability to catch them from 1.3% to 1.7% than exact number at 1.5%.

You can use 3% to 4% as well but you will have less chance to see and catch them. If you can catch the 1.3% - 1.7% with three more times than 3% to 4%, why do you not enjoy 1.3% to 1.7%?

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Quote from: tbct_mt2 on June 20, 2021, 01:03:02 AM

From 1.3% to 1.7% can be good because you can wait for liquidation for margin trades that will happen many times within a day.

I can not say how much the difference is in price as it depends on price of Bitcoin. With Bitcoin price around $35,660, differences from $460 to $600 are good to trade.

Do you have any explanation to justify your statement of 1.3% yo 1.7% because I believe this seems like too narrow differences and market may get converge before you try to catch the price gaps.

Moreover, I don't think there is any chance of arbitraging bitcoin nowadays because almost every exchange has the same price so it only exists and that too narrowly in the altcoins market. There are several bots in the market that serve the same purpose and might be worth testing these things with a free bot first.

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I think arbitrage, as long what we get is more than fees that we paid when withdraw our money, i think is good. Because what should be important in arbitrage is how much wall order in the destination market and what time to send our coin to that market. Becaue our rival is not 1-2 but a lot of people who see that chance to get profit from arbitrage.

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Quote from: joniboini on June 19, 2021, 07:24:59 PM

Isn't that very risky though? If I understand this correctly, then you also need to transfer your coins between exchanges right? Are you sure the price won't change, or the transfer will make it through before the price change?

As far as I can remember, most exchanges require 1-3 confirmations nowadays, which is around 10-30 minutes (ideally).

There's always a risk of price movement but if the coin you are trading has good market cap chances are that it won't drop in the time you withdraw and deposit coins from one exchange to another. Newly listed coins are risky though and one should avoid taking chance in such pairs because the market might look unstable and profitable from an arbitrager's point of view, but this isn't always the case, the market may become liquid within hours.

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Quote from: Bitcoin_Arena on June 19, 2021, 06:58:50 PM

Are you using an effective bot for arbitraging?

as i said in first post i am not doing arbitrage with bitcoin and just wanted to know what those who do think about this kind of difference since i saw it exist for over an hour that day without anybody taking advantage.

Quote from: joniboini on June 19, 2021, 07:24:59 PM

Isn't that very risky though? If I understand this correctly, then you also need to transfer your coins between exchanges right? Are you sure the price won't change, or the transfer will make it through before the price change?

As far as I can remember, most exchanges require 1-3 confirmations nowadays, which is around 10-30 minutes (ideally).

trading is always risky, arbitrage even more. but the biggest risk is the lack of liquidity in my opinion as with altcoins that their price can change easily or if you wanted to dump your amount you'll get stuck because nobody is there to buy it from you.
you also don't have to transfer funds, you can have some balance on both places and use those. besides it would be selling bitcoin at higher price in bitcoin exchange then transferring USDT to Binance which is quick and then dumping it for more bitcoin.

this is when i wish exchanges were accepting lightning network payments because it would have become instant.

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Quote from: BrewMaster on June 19, 2021, 10:06:32 AM

i have used arbitrage trading strategy myself but for altcoins only and whenever their price had a big difference. but i am curious what percentage is the ideal price different for people who use this strategy for bitcoin trading.

It depends on the volume too because if you are going to buy a huge volume of coins from one exchange and sell them to another at a higher price, which in essence is arbitrage trading, you can work on really low margins but if you are trying to trade small amounts then yeah I guess at least 5-6% difference should be there considering there would be some trading fees and there will be withdrawal fees too when you move the coins from one exchange to another.

Recently when suddenly Shiba Inu token was listed on many exchanges, I saw it was being traded at different prices on Poloniex and Binance but the withdrawal fees was hefty and I was unable to take advantage of the situation. If only I was doing it on a large scale or the withdrawal fees from Polo was cheaper, I could have made some good money.

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I guess there is no ideal price to use arbitrage because that will depend on yourself. We have different ideal prices, but maybe you can try with 1%-5% different price to arbitrage. You need to know the estimation for the coins that arrives in the destination exchange because sometimes, the different prices will only happen in a short time, sometimes less than 5 minutes. And do not forget about the fee because you need to make a profit after you pay the trading fee. If you think you got BEP, you still lose because you need to think about the fee in the trading that you should pay.

I do not try arbitrage trading because that is too dangerous for me and I do not want to risk my money. I can not move fast as other people and many times, and I miss the time to send and sell at the right time.

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Arbitraging manually is a tough thing to do because the rates of different exchanges are quite fast to catch. In Gunbot, we have the tool called Bitrage and it works right now with intraexchange instead of interexchange. It uses triangular arbitrage and it will automatically check if it's profitable already or not.

Anyway, the set exchange usually is set to 0.1% gain. And it will be hard to do that manually because the arbitrage opportunity is quite hard to spot between different pairs.

You are lucky to have traded altcoins and profited 1% with arbitrage.

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It depends on the time and speed of bots but with platforms that have high trading volumes and good liquidity, it is possible to find a price difference between 1% to 2% as a maximum, so any ratio between these two numbers is very profitable.
The price differences at the present time may be very volatile, especially in the times of the day, so again, it depends on the ideal time more than it is a daily strategy.

I remember in the past that the difference between some platforms in Korea and the American ones was up to $2000, while the price was in the range of 3000 to 7000.

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Quote from: BrewMaster on June 19, 2021, 10:06:32 AM

for example looking at Binance the price has been about $300 to $350 below the market price and that is about 0.83% to 1% difference which looks good enough for bitcoin with a highly liquid market to me.

From 1.3% to 1.7% can be good because you can wait for liquidation for margin trades that will happen many times within a day.

I can not say how much the difference is in price as it depends on price of Bitcoin. With Bitcoin price around $35,660, differences from $460 to $600 are good to trade.

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Quote from: joniboini on June 19, 2021, 07:24:59 PM

Isn't that very risky though? If I understand this correctly, then you also need to transfer your coins between exchanges right? Are you sure the price won't change, or the transfer will make it through before the price change?

As far as I can remember, most exchanges require 1-3 confirmations nowadays, which is around 10-30 minutes (ideally).

Bots can usually bypass this by having funds in both exchanges which one thinks there's a price difference, so trades are executed as fast as possible before the price difference reduces.

Another type of arbitrage trading that doesn't require transfers or withdrawals is Triangular Arbitrage trading within the same exchange for example like Trading BTCUSDT then ETHUSDT then ETHBTC and repeat, in which the price difference can be profit.

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Isn't that very risky though? If I understand this correctly, then you also need to transfer your coins between exchanges right? Are you sure the price won't change, or the transfer will make it through before the price change?

As far as I can remember, most exchanges require 1-3 confirmations nowadays, which is around 10-30 minutes (ideally).

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Are you using an effective bot for arbitraging?

If not, then have it in mind that you as a person are competing against hundreds and hundreds of bots Grin

Chances of making a decent profit are low especially on exchanges like Binance.

A few things i noticed about arbitrage trading
1. For pairs like BTC/USD or USDT, the difference is always so small. So those with huge volumes or high frequency trades make profits.
2. Most of the big price differences come about due to one of the platforms having technical issues like wallet for a certain coin being under "maintenance"(no deposits or withdrawals possible) so one can easily make losses if they rush to trade minus finding out what's happening with the other platform. Therefore, the bigger the price difference, the less likely you will pull it off.

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Quote from: jrrsparkles on June 19, 2021, 10:33:49 AM

means people with a million dollar can make $1000

the 1% of a million is $10,000 which was the existing difference for about an hour just now. but you are right that the profit of this size is still small but the difference is that you know that even if you want to buy or sell a large amount of bitcoin you can do that since the existing order sizes aren't as small as altcoins.

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Arbitrage trading using Bitcoin is highly risky amd the profits are going to be based on the how much capital we are having means people with a million dollar can make $1000 with very negligible price difference and people with 100 dollar can neber think about doing arbitrage trading. Anyway let's assume $500 difference can be a good difference.

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Quote from: BrewMaster on June 19, 2021, 10:06:32 AM

i have used arbitrage trading strategy myself but for altcoins only and whenever their price had a big difference. but i am curious what percentage is the ideal price different for people who use this strategy for bitcoin trading.

for example looking at Binance the price has been about $300 to $350 below the market price and that is about 0.83% to 1% difference which looks good enough for bitcoin with a highly liquid market to me.

Bitcoin arbitrage is not too profitable because most of the time the price is same all the exchange. But it also depend on how much profit will come after making the trade according to your portfolio. And it's always the big portfolio the big profit will come. For why for bitcoin arbitrage people need big amount. So I think if 1% then it's ok for bitcoin. even more than 1% we should not expect it.

BrewMaster

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i have used arbitrage trading strategy myself but for altcoins only and whenever their price had a big difference. but i am curious what percentage is the ideal price different for people who use this strategy for bitcoin trading.

for example looking at Binance the price has been about $300 to $350 below the market price and that is about 0.83% to 1% difference which looks good enough for bitcoin with a highly liquid market to me.

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