What is Arbitrage and Why Is It Important?

Arbitrage is an advanced trading strategy that finds different markets with different prices for the same thing. Buy and sell right now at a immediate profit.

Win almost every trade. If the prices aren't profitable, look for better opportunities.

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What is the safest way to trade?

Arbitrage. It's safest because you know your buy and sell prices in advance. If you can't sell at a good price, you don't buy. That makes it pretty hard to lose money.

What kinds of arbitrage are the most profitable?

There are 2 very profitable forms of arbitrage:

  • High frequency trades with small returns.
  • Low frequency trades with higher returns.

Since the 1980s, High Speed Trading bots have completely dominated high frequency / low return arbitrage. There's not much opportunity there. The bots eat the feast. For traditional exchanges such as stocks, bonds, and commodities, HST is completely standardized and automated. Bots grab the profits in a fraction of a second. Humans just aren't fast enough to compete. And because the bots immediately take advantage of trades the instant they appear, the spreads stay tiny.

But there are hundreds of cryptocurrency exchanges, all with different prices. There's no standard for high speed trading, so most bots don't know how to talk to more than a few exchanges. Many prices are updated at human speed. That gives alert traders an opportunity to buy from one at a low price and immediately sell to an exchange with a high price. That's arbitrage.

Cross-exchange cryptocurrency arbitrage is lower frequency, but higher returns.

What is the best arbitrage trade?

Low frequency with higher returns

The safest and most profitable arbitrage is crypto arbitrage, specifically cross-exchange cryptocurrency arb.

Arbitrage has huge advantages

  • Win almost every trade. You know your sell price before you buy. If you can't sell at a good price, you simply don't buy.
  • No waiting. Take your profit immediately.
  • No trying to predict the future. All you need is current prices.
  • Prices up. Prices down. Doesn't matter. There are always exchanges with different prices.
  • No worries about volatility. In fact, that's usually when price spreads between exchanges are best. You make more money.
  • Bad trades are rare. There's almost no risk that you'll have to sell at a bad price.With most investments that's your biggest worry.

Of course, there are tradeoffs to everything

There's no gambler's high. You won't get rich quick. There's some work involved. But arbitrage is a lot more profitable. And usually much safer.

Why is TopArb your best choice?

  • You get much more profit. TopArb monitors 187 exchanges for you. It then selects the best right now. You get much wider spreads between buy and sell prices. That means much more profit.
  • Your money and financial details are between you and the exchanges where you have accounts.
  • All keys and passwords for the exchanges are never on TopArb's servers. They are stored in your local browser storage
  • We never track your transactions. We know if you're a customer, where you have accounts, and when you're trading. TopArb places orders directly from your device to each exchange. We don't know how much, which currencies, or if you even completed an order.
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