Deconstructing Arbitrage Trading Strategy to Become A Better Crypto Trader

Too Long; Didn't Read

Arbitrage trading can be defined in a fairly simple way - purchasing an asset or commodity for one price and selling it for a different price profiting on that difference. Different exchanges will have different prices for any assets due to a difference in liquidity. The higher the spread value, the more profit can be made from a trade. However, arbitrage trading actually helps to stabilize asset’s price across different exchanges. Because the market has a tendency to stabilize itself, there are not too many arbitrage opportunities in the first place.